Washington, D.C. – Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and Senator Maria Cantwell, D-Wash., today introduced legislation to preserve and expand affordable housing amidst the COVID-19 pandemic and economic crisis.
The Emergency Affordable Housing Act, which is cosponsored by Senators Michael F. Bennet, D-Colo., and Benjamin L. Cardin, D-Md., includes a number of provisions to increase the value of the Low-Income Housing Tax Credit (LIHTC) and ensure projects are not abandoned. Similar provisions are included in the infrastructure legislation being considered by the House of Representatives this week.
“The lack of affordable housing was a national crisis before the pandemic, and this crisis has made even clearer that millions of Americans are only a missed paycheck away from not being able to pay their rent or mortgage. This country needs more affordable housing, not less. Congress can’t allow this crisis to increase homelessness and further reduce the supply of affordable housing,” Senator Wyden said. “Our bill includes common sense policies that would help preserve existing affordable housing and create new affordable housing by ensuring the continuation of projects in the pipeline.”
“We have an affordable housing crisis across the United States. Demand continues to grow, and our supply hasn’t kept up,” said Senator Cantwell. “The Low-Income Housing Tax Credit is a proven, successful, bipartisan tool that builds 90 percent of new affordable housing nationwide. The proposals in this bill will help build 500,000 units of affordable housing and give communities the resources they need to fight back against this crisis.”
A summary of the legislation priorities follows:
· Expand LIHTC production: As the economy reopens and homebuilding resumes, the bill would expand the 9% credit for new construction by 50%, ramped up over two years. The bill would set a minimum value under the 4% credit for purchase or rehabilitation of existing buildings, as low interest rates have eroded the credit’s value. The bill would temporarily allow more 4% credits to be paired with bond-financed affordable housing projects. The bill would allow 4% credit projects in difficult or costly development areas to benefit from a “30% basis boost.” The 30% basis boost would also be extended to 4% and 9% housing credit projects in rural and Indian areas, to compensate for higher costs and lack of affordable housing.
· Increase LIHTC credits for projects housing families most in need: The bill would provide a 50% larger credit for projects housing low-income families with incomes below 30% of the median area income. The bill would create a separate credit within LIHTC to fund the supportive services needed to keep families housed, including health and mental health services, benefits coordination, job training, and financial counseling.
· Keep LIHTC developers and operators afloat: Due to the pandemic and resulting economic crisis, construction has been halted, lease-up of finished buildings has been delayed, and LIHTC deals are now on shaky financial ground. To keep developers afloat and prevent LIHTC investors from walking away, the bill extends key compliance deadlines, front-loads the LIHTC credit into the first year, and expands the 4% housing credit for current deals.
· Close loopholes to preserve and promote affordable housing: The bill repeals the “qualified contract” option that allows LIHTC owners to convert properties to market rate after just 15 years. It also prohibits the consideration of local support or opposition, or local government contributions in deciding where to build affordable housing.
Text of the legislation is available here.
A one-page summary of the legislation is available here.
A detailed summary of the legislation is available here.