But they achieve these ends in different ways. Let's look at each policy separately. Without the credit, businesses or individuals would have no reason to invest in an industry that is building housing for families that cannot afford to pay rents high enough to make the property valuable and ensure a competitive rate of return on the investment. The credit makes investments in low-income housing attractive, and as a result has generated billions of dollars of equity for this vital industry. In other words, there is a quid pro quo .
Investors can make money on the credit, but only if they fulfill their obligations.
They must make sure that the housing continues to be available to low-income families. They must make sure that families are not charged rents that exceed 30 per cent of their household income. And they must make sure that the housing stays in good repair. If investors do not comply with these requirements, the tax benefits will be reclaimed. Second, they are not designed to ensure a competitive rate of return on the investment.