Trump administration officials earlier this year killed a federal criminal investigation into the coal empire owned by Sen. Jim Justice, a Republican from West Virginia and a close ally of the president’s.

The investigation examined potential criminal violations of the Clean Water Act by the multistate mining operations largely run by Justice’s son, Jay, according to current and former officials familiar with the matter.

The criminal probe was a significant escalation in the yearslong effort to police serial pollution offenses by Virginia-based Southern Coal and dozens of affiliated mining operations controlled by the family. In the past decade, Southern Coal and other Justice corporations have racked up tens of thousands of alleged violations of the Clean Water Act and have been sued repeatedly by state and federal prosecutors over their failure to properly follow environmental laws at their mining sites.

The investigation shuttered by the Trump administration was a joint effort by prosecutors and investigators with the Environmental Protection Agency, the Department of Justice’s Environmental Crimes Section and the U.S. Attorney’s Office of the Western District of Virginia to probe whether the incessant violations of antipollution laws had risen to the level of criminal behavior, people familiar with the matter said.

People familiar with the investigation told ProPublica that prosecutors believed they had a strong case. They initially had the blessing of Robert Tracci, President Donald Trump’s top official in the Western District of Virginia, to move forward.

But in recent months, as prosecutors battled the Justice companies in court over subpoenas for records, the Office of the Deputy Attorney General shut down the probe. At the time, Todd Blanche still headed the office, before assuming the role of acting attorney general in April.

“They were told ‘pencils down,’” a person familiar with the investigation said.

That prosecutors were even conducting a criminal investigation is noteworthy, people said, because the DOJ only charges a dozen or so criminal Clean Water Act cases each year. It is rare for top DOJ officials to derail a criminal investigation initiated by career officials at such an early stage, people familiar with the case said.

“I’ve never heard of that happening before,” said former federal prosecutor Rick Mountcastle, speaking generally about DOJ protocols. Mountcastle spent 24 years as a prosecutor in the Western District of Virginia. “There shouldn’t be some sort of untouchables list of people who are immune from enforcement.”

The move is part of a pattern of behavior at the top echelons of the DOJ to push cases against Trump’s political adversaries and ease up on allies.

Environmental enforcement against large polluters has plunged under the second Trump administration. Just days after inauguration, the administration reassigned top career environmental lawyers at the DOJ, including those overseeing the Southern Coal case, to work on the president’s immigration crackdown. At the beginning of the year, Blanche personally ordered prosecutors to stand down from cases against diesel emissions cheating.

Steven Ruby, an attorney for the Justice companies, said they became aware of the criminal investigation earlier this year.

“Ultimately the finding of the inquiry by the government was that there wasn’t any evidence to pursue criminal charges,” Ruby said. “There’s never been any intentional wrongdoing by the companies.”

While objecting to the subpoenas in court, the company simultaneously convinced the DOJ to drop the case, he said.

“The Justice companies — because Sen. Justice has been governor and because he’s now a senator — are singled out and put under a microscope, and there’s news coverage of violations and consent decrees and compliance actions,” Ruby said. “But the fact of the matter is that those kinds of issues exist throughout the industry.”

Current and former government officials familiar with the companies’ environmental record called them routine bad actors. 

Spokespeople for the EPA and the Western District of Virginia referred questions to the DOJ. Justice’s senate office did not respond to questions.

“There is no case to be made here for a criminal investigation,” Emily Covington, a DOJ spokeswoman, said in an email. “Any career prosecutor who would paint a criminal case as strong is simply a deep state prosecutor continuing to push the priorities of the Biden administration.”

The deputy attorney general’s office is routinely involved with reviewing cases, she added. The office determined that this case was not consistent with the Trump administration’s priorities, she continued, and it was more appropriate to resolve it through the less punitive civil process. “The bottom line is that this was a politically motivated prosecution for a case that can and should be resolved civilly,” she wrote.

The Justice family runs a sprawling coal mining enterprise that extends across the South. Estimates of its fortune fluctuate. Forbes tallied Jim Justice’s net worth to be as much as $1.9 billion until 2021; more recently, it declared him “broke” and facing $1 billion in debt. But environmental groups have accused his companies of misrepresenting their assets to avoid paying environmental penalties. 

Ruby said company finances seesaw because coal is a “boom and bust” industry.

Justice, who was first elected governor of West Virginia as a Democrat, announced he had become a Republican at a Trump rally in 2017. Trump backed Justice’s bid for Senate in 2023, amid a contested GOP primary. Justice went on to win the seat, helping Trump clinch a GOP majority in the Senate.

Coal mines often leach dangerous chemicals like arsenic into waterways and are required to strictly monitor pollution discharge and keep it under certain limits. The family’s companies have settled many accusations of environmental violations by agreeing to pay fines and invest in better pollution prevention without admitting or denying culpability.

In recent years, however, the company has repeatedly flouted regulators and the legal process. Jay Justice has been a no-show at court hearings involving Clean Water Act violations in the past, and in 2024 a judge in Alabama issued a civil contempt order against him for his repeated failure to respond to those lawsuits. Ruby, the Justice companies’ lawyer, attributed the violations in that case to surrounding facilities the family does not own. The case is now in mediation. 

A number of recent legal proceedings have laid bare the extent to which the Justice companies may have knowingly violated environmental laws, a key threshold for bringing a criminal matter. 

Such allegations surfaced in a 2023 civil case brought by the Justice companies’ former chief of environmental compliance Robert Fowler. In the suit, Fowler claimed that Jay Justice blocked him from spending the money necessary to comply with environmental laws, including making court-ordered payments and repairing equipment. As a result, according to emails disclosed in the lawsuit there were at times complaints of near-daily violations of permit water requirements.

In a resignation letter and in subsequent court filings, Fowler said he was concerned the circumstances exposed him to “potential civil and criminal liability.” Fowler declined to comment. 

The Justice companies denied Fowler’s accusations. The Justice companies believe the government’s criminal investigation was based primarily on Fowler’s claims, which Ruby dismissed as the allegations of a “disgruntled” former employee. 

Last month, a jury in Alabama found that the Justice companies had made false representations to Fowler about his role, but it did not award him the millions of dollars in damages he demanded in his lawsuit. The judge has yet to enter his final ruling.

In the DOJ’s aborted investigation of Southern Coal, prosecutors and federal agents had begun to gather evidence, scrutinizing testimony in the Justices’ various civil trials, and had approached former employees seeking information. Government attorneys also sent subpoenas seeking further documentation, said those familiar with the probe, a move that was opposed by the company’s lawyers.

People familiar with the case said Justice Department attorneys were ready to fight the Justices’ lawyers over the subpoenas.

But before they could move forward, Blanche’s office shut it down.

The post Trump Administration Killed Criminal Investigation of GOP Senator’s Coal Companies appeared first on ProPublica.

On the day 5-year-old Lens Joseph was killed by a Boston Public Schools bus last year, the driver had already struck a postal truck, ignored a stop sign and missed several stops, prosecutors said. When he got to Lens’ house, he dropped him off on the wrong side of the street and then ran over the kindergartner as he crossed in front of the bus.

Transdev, a multinational company that has been the city’s sole bus contractor since 2013, hired and trained the driver of the bus that killed Lens. Yet a federal safety database shows no sign that the company was involved in the April 2025 crash. WBUR and ProPublica found at least 60 fatal Transdev crashes in the last decade, but the federal database shows only 18 under the company’s name. That means 42 fatal crashes are not identified as Transdev’s.

This missing information is important because the Federal Motor Carrier Safety Administration, which oversees commercial motor vehicles, relies on it to pinpoint unsafe companies.

But the process the agency uses to collect information is faulty: It identifies only a fraction of a company’s fatal crashes.

As a result, the full safety record of Transdev, one of the largest private operators of public transit in the U.S., remains a secret to regulators, the public and the local government agencies that might award it a contract.

“That is a serious, serious gap in safety,” said Peter Kurdock, general counsel with Advocates for Highway and Auto Safety, a nonprofit that promotes transportation safety and has pushed for improvements in crash data for years. “And it’s a serious, serious shortcoming when it comes to the regulation of these carriers by FMCSA.”

The deadly crashes associated with Transdev span at least 16 states and involve pedestrians, at least two bicyclists and other vehicles. Lens’ death and at least two others have resulted in criminal charges against the bus drivers. Transdev did not provide comment on any specific crash.

The crash data feeds into FMCSA’s online Safety Measurement System, which makes safety records public for bus companies nationwide. Instead of listing Transdev, that data often lists collisions under the government agency that hired Transdev or the name of a company it acquired. Also, when crashes are listed under other names, companies that oversee the buses involved are not required to claim the collisions. The agency’s instructions for how to determine the motor carrier involved in a crash are interpreted differently by police who respond to the scene, the news organizations found.

Based in France, Transdev has vast U.S. operations. It says it holds contracts in busing, light rail and other forms of public transit in 46 states, plus Washington, D.C., and Puerto Rico. The multibillion-dollar company employs more than 30,000 people nationally. Transdev’s only school bus contract is with Boston Public Schools.

Transdev U.S. CEO Laura Hendricks declined an interview. In a written statement, Transdev said it complies with “federally mandated reporting standards.”

“Transparency and continuous improvement are central to our safety approach, and we work closely with oversight agencies and our clients to ensure our practices meet or exceed expectations,” the statement said.

The statement did not respond to questions about why Transdev did not ensure crashes the company was involved in were logged as part of its safety record. It did stress that reporting crashes is the responsibility of law enforcement.

At the publications’ request, Transdev reviewed lists of the crashes that reporters tied to the company. Transdev confirmed that most of them matched with collisions in their records but did not have records for all of them.

The FMCSA did not respond to requests to interview Derek Barrs, the head of the agency, or emails with a list of questions.

Other than the federal database, there are few ways to connect crashes to particular bus companies. A different database, run by the Federal Transit Administration, records transit crashes but doesn’t connect them to contractors. Separately, FMCSA requires all bus companies to keep an internal register of how many serious crashes take place during their operations. However, those records are not open to the public, and companies are not obligated to submit the information to regulators unless they ask for it. Transdev declined the publications’ request for its register.

So while Transdev may know about its own collisions, federal agencies and the public often don’t.

Darin Jones, a former FMCSA Midwest field administrator, spent more than 35 years in federal transportation safety and often oversaw investigations. He said investigators are supposed to consider a company’s serious crashes as part of their assessment. If many are logged inconsistently, they cannot determine whether Transdev or any other company is operating safely.

“ The knowledge of this motor carrier’s operation, any motor carrier’s operation, is critical,” said Jones. “If you don’t have the full picture of an operation, how do you truly know what’s going on?”

At least in Boston, Transdev appears to have had no serious school bus crashes over 10 years. But that’s not true. WBUR and ProPublica uncovered at least 71 serious crashes involving the company that weren’t under its name.

Kurdock says the FMCSA needs to fix its safety data, especially in Boston.

“The  agency needs to be much more proactive in ensuring that the data they do have is accurate, even more so when you’re talking about a carrier that is operating a transportation service for schoolchildren,” Kurdock said. “If there is one bipartisan issue left here in Washington, D.C., it’s that schoolchildren should have a safe ride.”

Nurse, Cyclist Among Those Killed

When a crash happens, local law enforcement fill out accident reports that document the location, identities of the drivers and companies involved. This information becomes part of the federal safety database and helps regulators connect a crash to a particular company.

But the news organizations found multiple examples where that system masked the company running the bus lines. For most of these crashes, the database is also unclear on whether the drivers violated traffic laws.

In Lens’ case, the motor carrier is listed as “CITY OF BOSTON MVMB,” an abbreviation for the city’s Motor Vehicle Management Bureau, which acquires and manages municipal vehicles. There is no mention of the school district or Transdev being involved.

Another crash killed registered nurse Renée Shea in southern Massachusetts in 2017. It appears under the name of the Greater Attleboro Taunton Regional Transit Authority, not Transdev, the agency’s contractor at the time. A bus made a left-hand turn into the path of the Jeep SUV she was driving, according to a police report. The bus company’s driver, Margaret Correia, may have been distracted because she began to take off her jacket before she made her turn, the report found. She could not be reached for comment. 

Correia pleaded guilty to misdemeanor negligent operation of a motor vehicle, court records show. A GATRA spokeswoman said Shea’s family received $1 million from the area transit agency’s insurer.

Charlie Shea said his ex-wife was a generous mother who had taken custody of her granddaughter.

As a former MBTA bus driver, Charlie Shea said he continues to be shocked by the bus driver’s actions.

Driving and taking your jacket off “ain’t a bright idea for anybody,” he said.

He said his ex-wife’s death, like all crashes, needs to be part of Transdev’s safety record.

“It’d make them more accountable,” Shea said. “They would have to use their safety records to get contracts from the state or the counties or from schools.”

Outside Massachusetts, there are dozens of other fatal Transdev crashes in the database with no mention of the company.

In a November 2023 Las Vegas crash, federal records list the Regional Transportation Commission of Southern Nevada as the motor carrier of a transit bus that killed bicyclist David Ortiz in a crosswalk. Court records state driver Johnelle Johnson, a Transdev employee, pleaded guilty to a misdemeanor vehicular manslaughter charge. A lawsuit by Ortiz’s family against Transdev and the driver was settled for an undisclosed sum.

Transdev has operated the Las Vegas-area bus system since 2023, when it acquired First Transit, which originally held the contract, the commission’s records show.

Although First Transit is now part of Transdev, at least five fatal crashes across the United States are still recorded under First Transit’s name after the acquisition.

Beyond the fatal crashes, WBUR and ProPublica also took a close look at all of Transdev’s serious, but nonfatal, crashes with Boston Public Schools. Those include crashes where any person was transported to a hospital or a vehicle was towed.

In a December 2024 crash, a bus lurched onto a sidewalk outside Curley K-8 School in the Jamaica Plain neighborhood. The bus struck an 8-year-old boy with autism and his school aide before smashing into two fences, a police report states. The crash sent both victims to the hospital with long-term injuries, their civil lawsuits against Transdev allege.

A bus camera showed that Transdev driver Vitony Laguerre’s eyes were closed and his head was back before he pressed the accelerator, police stated. He pleaded not guilty to a misdemeanor charge of negligent operation of a motor vehicle.

The federal record lists the city of Boston, not Transdev, as the carrier.

Attorneys for Laguerre and both crash victims did not comment for this story. Laguerre and Transdev denied they were negligent in the crash, according to records in an ongoing civil case.

Boston Public Schools Superintendent Mary Skipper declined an interview request. A spokesperson did not answer a list of questions, but in a written statement said that the district follows established safety protocols and has worked with Transdev over several years to improve accountability and performance.

“We will continue to work with our transportation partner to monitor performance, address issues as they arise, and ensure every student gets to and from school safely,” the statement said.

Local Law Enforcement Takes Over

The current system of collecting and publishing bus crash data began as part of a federal push for safer roads. In the early days of this work, in the 1970s and 1980s, rules put the burden on bus and truck companies to self-report serious crashes to the U.S. Department of Transportation. Each operator had to report its fatal bus crashes in person or by telephone “as soon as possible”; crashes that resulted in injuries or serious vehicle damage had to be reported in writing, and in triplicate.

But both companies and federal safety investigators complained the process was burdensome and inadequate. For one thing, investigators could not tell whether companies failed to report their accidents, said Jones, the former FMCSA regional administrator.

Regulators and traffic safety researchers thought they could do better. At the time, many states were already collecting crash information electronically from local police departments.

“Why burden the industry with reporting?” Jones said. “We had a more accurate record from the states.”

So in 1993, the federal Department of Transportation decided to end self-reporting by carriers. Today, local law enforcement agencies send their bus and truck crash information to state agencies, which submit it to FMCSA.

After investigating, a local officer must fill out a form that asks for the name of the bus company, or “carrier,” that is involved in the crash and the company’s U.S. Department of Transportation identifier. FMCSA training material recommends the officer determine which company should be included in the form by figuring out which entity “controls” or “directs” the bus.

For transit and school buses, this decision can be surprisingly complicated. Transdev employees may be behind the wheel, and the company may manage the daily operations of the buses, but the transit agencies or a school district may choose the routes. So who is in charge? In these cases, Transdev’s role often disappears in the data.

Transportation experts and former FMCSA officials said bus companies can voluntarily inform the agency that crashes under other names belong to them.

But Alex Scott, a University of Tennessee, Knoxville transportation expert, said companies rarely update the federal record, according to research he published in 2021. “There’s not really an incentive for them to account for all of their crashes,” Scott said. “If a company could just magically make them go away, of course they would.”

Boston City Councilor Erin Murphy, a former teacher for the district where Lens attended school, has become a vocal critic of how Transdev operates its buses. She was shocked when she learned from a reporter that the company is not required to take steps to ensure all its crashes are part of its federal safety record.

“Horrifying,” she said. “Why would they be able to not report accidents — one that was a fatal accident? There’s nothing worse than a fatal accident.”

“There’s not really an incentive for them to account for all of their crashes. … If a company could just magically make them go away, of course they would.”

Alex Scott, a transportation expert at University of Tennessee, Knoxville

After several passenger bus crashes with multiple fatalities, Congress passed legislation in 2012 that gave FMCSA powers to conduct more comprehensive inspections into the safety operations of bus companies.

When Transdev underwent one of these reviews in 2016, investigators uncovered what they described as “numerous crashes” that were not listed as part of the contractor’s safety record, according to the inspection report. There were enough crashes that the FMCSA planned to give Transdev a “conditional” safety rating, which would mean the company had insufficient safety procedures.

Because local police departments may not “be aware or equipped” to report crashes to the FMCSA, the carrier should report them, the report stated.

“This self reporting is required for accurate evaluation by FMCSA and the accurate safety record of the carrier,” it added.

The company successfully appealed the decision to lower its safety rating by arguing its drivers could not have prevented many of the crashes investigators uncovered.

FMCSA investigators urged Transdev to report to the agency when its role in a crash is not reflected in safety data, yet the company’s name continues to be absent from many of them. Transdev did not comment on this recommendation.

A Father Seeks “Justice”

Lens’ death last year became a local flashpoint, shedding new light on Transdev’s safety procedures and raising questions about its ability to keep the city’s children safe.

The driver of the school bus that killed Lens should not have been behind the wheel that day, and the bus never should have been on the road, according to information from city officials and prosecutors.

Driver Jean Charles became ineligible to operate a school bus in December 2024 after a required driving credential expired, according to a statement from Boston Mayor Michelle Wu’s office last year. But the company did not take him off the road then. In the weeks before Lens died, Charles had two minor collisions and underwent remedial training, it said, and soon returned to work.

On the day of Lens’ death, Charles began his shift without conducting a required pretrip inspection, prosecutors alleged. One of the bus’s four rear tires was flat, and a safety crossing bar was broken. Transdev is also in charge of maintenance, but it’s unclear how long the bus had these problems.

Had Charles followed procedures, the bus would have been sent for repairs, prosecutors said. And yet Charles set off on his route to UP Academy Dorchester, where Lens climbed aboard.

At 2:42 p.m., Charles dropped off Lens and his 11-year-old-cousin on the wrong side of their street. To get home, they would have to cross in front of the bus.

Neighbor Carolyn Tomlinson was inside her home cleaning windows when the cries of a child brought her outside. She followed the sound to the corner of Glenwood Avenue and Washington Street, where she saw the cousin screaming. Lens was on the ground.

“I’m looking at Lens, just lying there,” Tomlinson said. “And as a mom it broke my heart.”

Tomlinson said she dialed 911 and held the cousin in her arms to comfort her.

“I was praying with her, saying, ‘It’s going to be OK. God’s got us,’” Tomlinson said.

Lens’ father, Esaie Joseph, had parked his truck in North Carolina after a day on the road as a long-haul trucker when his brother told him about the crash in a phone call. Hours later, he got word that his boy was dead.

Lens was Joseph’s only son, and he was self-assured beyond his years, his father said in an interview with WBUR. His nickname was “smart guy.”

Every time Lens asked Joseph for a new toy, he’d begin with, “Dad, you know I’m a smart guy?” the father recalled.

Joseph has kept his son’s soccer ball and toy cars, and he smiled as he sorted through them on a recent evening: a police car, because Lens wanted to be an officer. A Spider-Man-themed car because he loved the superhero.

After he lost Lens, Joseph stopped driving trucks and moved with his relatives to a new neighborhood, away from the scene of the crash. He now is a driver for a city of Boston van service for seniors.

He and his family are suing Transdev and Charles, who resigned from Transdev soon after the crash. Joseph said he wants some good to come from Lens’ death, and for Transdev to operate safely.

“The first thing I hope is justice for him,” he said. “They have to care for safety so something like this will not happen again.”

Charles pleaded not guilty to felony involuntary manslaughter and other charges in March. His attorney did not respond to requests for comment.

Transdev did not comment about the crash and said the company had discussed its safety measures publicly during a Boston City Council meeting last August. The company and Charles denied in civil court filings that they were negligent or reckless.

Transdev is in the third year of its five-year, $651 million contract with Boston Public Schools and transports about 19,000 of the district’s students every school day. It is currently looking to expand in Boston, where it is one of three finalists for a multibillion-dollar commuter rail contract.

To this day, the federal record does not show that Transdev was the operator of the bus that killed Lens. Neighbor Tomlinson wants it to be part of Transdev’s safety record so regulators can hold them accountable, and agencies and school systems can understand the companies they are hiring.

“It should be visible to the ones that need it, so we can see it and keep our babies safe,” Tomlinson said.

The post A School Bus Killed a 5-Year-Old. The Crash Is Among Dozens Missing From the Bus Company’s Federal Safety Record. appeared first on ProPublica.

On any given night, thousands of people sleep on the streets in Portland, Oregon. They seek shelter in tents, bushes and overpasses in a city that has struggled with one of the worst housing crises in the country.

Portland, like many cities, has raced to increase its supply of affordable housing by turning to a federal program that’s existed since the 1980s: the Low-Income Housing Tax Credit. It provides up to $15 billion worth of tax credits a year nationally to help developers build apartments. Portland supplemented the federal construction money with local dollars, creating incentives that were hard to turn down.

But to meet the affordability requirements, all the developers needed to do in most cases was put rents within reach of someone earning 60% of median income, an earnings threshold that equates to about $75,000 annually for a family of four. It turns out that this amount of rent is now close to what the typical Portland landlord charges without any subsidy.

The result of the federal tax credit has been a glut of apartments costing renters on the order of about $1,400 a month for a one-bedroom. That’s a manageable outlay for a family making $75,000 but nearly half the monthly income of someone who earns $35,000 at the local minimum wage.

Nearly 2,000 of Portland’s subsidized units sat vacant and unused at last count, as The Oregonian and Willamette Week have reported. The same situation has repeated from Seattle to the San Francisco Bay Area to Denver.

Economists and other academic researchers have been warning for decades that this was precisely the sort of problem that the Low-Income Housing Tax Credit was likely to create.

Studies have concluded that the program, which currently supports nine out of every 10 subsidized units built in America, is an expensive and ineffective way to house people who can’t afford it. Researchers have said it doesn’t subsidize housing deeply enough to reach truly low-income renters, so it produces housing in markets and at income levels that already have a surplus instead of filling a shortage.

Independent researchers have found little evidence it’s expanded the overall housing supply beyond what the market would have produced without it. Its complexity has birthed an industry of affordable-housing-focused developers, investors, lawyers and accounting specialists who profit off the tax credit. Between 1991 and 2024, a dozen studies concluded that many more people could benefit if the money were spent on rental vouchers, which let consumers, rather than the government, decide which landlords get tax subsidies. Estimates went as high as twice the impact for the dollar.

“The evidence is telling us this program is lacking its reason to exist,” said Kirk McClure, an emeritus professor of urban planning at the University of Kansas and a leading critic of the tax credit. “We should reform the program to make it work better.”

McClure and others have brought their concerns to Congress. He recommended diverting the money into rental vouchers for tenants, or else changing the tax credit’s rules to reward only developers who build units in genuinely short supply: those affordable to people at the very bottom of the income ladder.

The ideas never went anywhere. Instead, money for the tax credit has grown at a much faster rate than rental assistance vouchers since 2000, data from the U.S. Department of Housing and Urban Development and the U.S. Treasury shows. Rock-solid support from industries that benefit from the tax credit and both parties in Congress has made it the linchpin of U.S. housing policy.

“The program leverages housing market forces, entrepreneurial innovation and private accountability to increase housing supply,” former HUD Secretary Ben Carson told the House Committee on Oversight and Government Reform in 2025.

Among the tax credit’s other prominent backers are two Northwest Democrats on the Senate Committee on Finance, Ron Wyden of Oregon and Maria Cantwell of Washington. Cantwell has introduced bills to increase funding for the existing tax credit, and Wyden has proposed expanding the target of the credits to benefit not just low-income families, but also middle-income households — the opposite of what McClure says needs to happen.

Both Wyden and Cantwell say Congress should hold more hearings to ensure the program is run efficiently, but they also defended it in written statements to Oregon Public Broadcasting and ProPublica.

“There isn’t any silver bullet to the housing crisis in Oregon and around the country,” Wyden’s statement said, “but the low-income housing tax credit has been the most successful federal housing construction program on the books for decades and is the only housing program Republicans haven’t tried to gut.”

Indeed, President Donald Trump has sought to cut housing programs such as rent assistance. But as part of his spending package last year, Congress approved the biggest expansion of the Low-Income Housing Tax Credit in decades.

“That’s a mistake,” McClure said.

It won’t alleviate homelessness or the housing shortage for people at the lowest incomes, he said. It will just create more buildings that compete with the market and with one another for the same pool of renters.

McClure recounted seeing a brand-new affordable housing complex near his home in Kansas not long ago with a sign enticing tenants of another government-backed complex down the street, promoting newer units at the same price.

“So the taxpayers of the United States subsidized the creation of this new property to help bankrupt another federally subsidized property,” he said. “That is stupidity 101. We have got to be better stewards of the American taxpayer’s dollar.”

Subsidized Vacancies

Oregon’s affordable housing production has skyrocketed in recent years. So have rents and homelessness.

Over the past decade, Oregon lawmakers doubled funding for the state’s affordable housing tax credit and started offering low-interest and deferred loans for construction.

Voters in the Portland area, meanwhile, passed housing bonds totaling more than $900 million. Developers can use that money to secure federal housing tax credits. The state went from building about 1,800 affordable units a year pre-pandemic to nearly 5,000 last year.

Industries that benefit from the tax credit say it’s the engine that makes that kind of building boom possible.

The Affordable Housing Tax Credit Coalition, representing lenders, developers and others in the industry, has called the program “the most effective tool we have to meet the affordable housing needs in rural, suburban, and urban areas.”

Jennifer Schwartz, director of tax and housing advocacy for the National Council of State Housing Agencies, which advocates for the tax credit and other housing programs administered by states, said the housing market by itself won’t produce a big enough supply of housing within reach for low-income renters. That goes for even those who receive federal rent vouchers, she said.

“It costs too much to build housing to turn around and rent it to households who are low-income households,” Schwartz said, “unless you have some sort of incentive like the housing credit.”

But in Portland, all that new construction hasn’t made a dent in the city’s affordability crisis. A report from the Portland Housing Bureau in 2025 found that rent and home sale prices were growing faster than incomes, even as the city’s vacancy rate was also rising.

The vacancy rate was roughly 7.6% as of May, according to Aaron Kirk Douglas, director of market intelligence at the Portland-based brokerage HFO Investment Real Estate. Vacancies are even higher for ostensibly affordable units: 11%, leaving nearly 2,000 units unused. Housing industry experts consider 5% vacancy to be a baseline for ordinary turnover.

The time it takes to verify that a tenant’s income meets the tax credit’s requirements and prep units for move-in played a role in the struggle to fill vacant units built with the federal subsidy. But housing advocates say the biggest barrier is price.

The gap between market-rate rents and affordable housing rents has shrunk, and not just in Portland.

By one industry estimate, in more than a dozen U.S. cities at least 40% of affordable housing was competing with market-rate buildings rates in 2025.

In the Portland suburb of Gresham, federal rules cap a two-bedroom apartment built with the Low-Income Housing Tax Credit at $1,675 a month. Zillow puts the equivalent market-rate apartment at $1,525.

Operators of a new $53.8 million development in northeast Portland, built with the tax credit and the local housing bond, had trouble filling studio and one-bedroom apartments whose affordable rents were near market rate. They began offering a month of free rent for new tenants, according to a March report from the committee that oversees the region’s housing bond.

Affordable housing providers, which in Portland are predominantly nonprofit organizations, are also increasing their marketing budgets to attract renters away from market-rate buildings.

“The idea that we’re competing with the market would have been unfathomable a few years ago,” said Margaret Salazar, CEO of Reach Community Development Corporation, one of Portland’s largest affordable housing providers.

Salazar, who led Oregon’s state housing agency during the COVID-19 pandemic and later worked as a regional director for HUD, is a longtime proponent of the Low-Income Housing Tax Credit. But she said the people who can afford to rent apartments the tax credit has produced would rather move into a market-rate apartment for similar money and with fewer rules and restrictions.

“It’s becoming a slimmer and slimmer slice of residents” that Reach can serve, she said. “Suddenly we’re competing for this little slice of people.”

Meanwhile, a substantial group of Portland-area residents remain priced out.

HUD data shows more than 90,000 households in Multnomah County earn less than the 60% of median income that a family would typically need to afford a federally subsidized unit. (The precise number of families who can’t afford “affordable” units is unclear because it depends on variations in household size, actual rent levels and other subsidies that might reduce rents further.)

Salazar said that right now Reach can rent to people at lower income levels only if it can find additional subsidies such as housing vouchers — and funding for vouchers is so limited that only 1 in 4 people who qualify are able to get them.

Despite the convergence of rent levels in market-rate and subsidized housing, supporters of the tax credit say it remains valuable because the units it subsidizes are constrained from raising rents faster than incomes — and there’s no guarantee market-rate rents will remain at this level in the future.

But Steve Rudman, who ran the local housing authority in the Portland area for more than a decade, said the fact that the tax credit is now delivering market-rate housing rather than housing for the poorest households raises an existential question for the federal program.

“What is this thing really doing?” Rudman said. “What is the Low-Income Housing Tax Credit?”

A Stopgap Takes Off

Criticism of the federal construction credit has been a near constant since it began.

In the Reagan era, housing experts began to worry rents would become unaffordable amid deep cuts to housing programs and the drafting of the Tax Reform Act, which eliminated several tax shelters for real estate.

McClure, an economist for the city of Boston at the time, worked with others to design a tax credit that would reward affordable housing production.

“It was meant to be a three-year stopgap until we came up with something better,” he said.

The idea was to incorporate low-income housing into market-rate housing construction that was already taking place. Developers could receive a tax credit if they capped rents for a certain portion of the apartments in their building, and they could continue to rent the rest at any amount they chose.

McClure crafted letters for Boston’s mayor to send Congress in support of the idea. His analysis helped decide the subsidy amount. Developers could offset 70% of the cost of new builds or 30% of the cost of a rehab. Congress signed off in 1986.

Almost immediately, the program diverged from the outcomes McClure had envisioned.

He and other drafters of the tax credit had thought developers would use it to offer deep discounts on a small number of units, allowing them to charge market rate on the rest. But developers found it more profitable to subsidize 100% of their units at the smallest allowable discount, a rent affordable to households at 60% of median income.

In 1992, as lawmakers considered making the 6-year-old Low-Income Housing Tax Credit permanent, an analysis by the Congressional Budget Office declared the program “unlikely to substantially increase the supply of affordable housing” and “more suited to the needs of investors than poor renters.”

For one, the tax credits cost a lot to administer, congressional economists said. They also pointed to evidence that subsidized housing production dampened market-rate construction.

Congress was preparing to give developers $3 billion through the tax credit as of 1992. Putting that money into housing vouchers instead, the CBO concluded, would help 550,000 households, more than twice as many as would benefit from the construction tax credit. The numbers echoed findings from an earlier HUD evaluation of tax credits vs. vouchers.

Congress made the tax credit permanent a year later.

As time wore on, McClure’s emerging doubts about a program he originally expected to be temporary only deepened.

When the Fannie Mae Foundation hired him in 1997 to analyze how the tax credit was doing, he concluded it was a “very inefficient subsidy delivery mechanism” that didn’t produce as much housing as it should have.

Other studies came to similar conclusions as McClure, HUD and the Congressional Budget Office. At least five found the tax credit does little to increase the overall housing supply.

The Government Accountability Office noted problems with the program in 2015, 2016, 2017 and 2018, finding it lacked basic oversight to show the federal funds worked as intended. A 2017 investigation by NPR and Frontline documented numerous examples of waste and fraud, including one developer pocketing tax credits without building the required housing.

“Given the available evidence on program performance, we should certainly not expand the tax credit program,” Edgar Olsen, professor emeritus of economics at the University of Virginia, wrote in a 2017 article for the American Enterprise Institute. “The existing evidence argues for terminating it.”

There are some critics within Congress. Rep. Glenn Grothman, a Republican from Wisconsin, introduced a bill to kill the program last year, calling it a “cash grab for developers and banks.” But the bill went nowhere.

Olsen, like McClure, remains adamant today about what he considers the tax program’s uselessness. In a recent interview, he told OPB and ProPublica that he’s urged policymakers, in academic articles and in testimony, to re-examine whether the program has any value at all.

“How often do they talk to people like me or like Kirk McClure? The answer is almost never,” Olsen said. “What they hear from are people who represent the financial interest of the industry, and so they want more money to be spent on this.”

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