This year, we celebrate the 20th anniversary of the low-income housing tax credit. As we do, it’s important we consider how we got here.
Many of us worked with the housing credit in its early years. Some of us even remember the marathon, round-the-clock tax committee meetings that produced it as part of the 1986 Tax Reform Act.
But what accounts for the housing credit achieving its 20th year? What has saved it from the fate of so many federal housing production programs that came before it?
First, Congress got it right. It built a system that works – a system under which states determine and prioritize their housing needs, not Washington; a system strengthened by the private-sector participation it invites; a system that holds all players accountable for producing quality housing that endures the test of time.
Second, the housing credit is doing what Congress asked of it. It has produced nearly 2 million quality, affordable homes for America’s low-income families, adding more than 100,000 to that number every year.
Through the projects it facilitates, the credit has housed working families and the very poor. It has housed families with children, seniors, persons with disabilities, at-risk youth, people in need of services and people who are homeless.
It has produced new housing and saved old. It has brought quality housing to our nation’s cities, rural areas and all the communities in between.
The credit has built and refurbished everything from apartment buildings, large and small, to single-family homes. It has helped us correct our public housing mistakes. It has anchored the transformation of whole neighborhoods.
But, is this enough? Is this all it takes to get a federal housing production program to its 20th year? Is it enough to build the right system and get the right result?
The answer is an emphatic no. There’s one more factor behind the housing credit’s longevity: persistent, relentless advocacy.
To get the housing credit to its 20th year has taken persistent, relentless advocacy by all who believe in it and have a stake in its future. And, that’s what it’ll take to keep it.
It took persistent, relentless advocacy to convince Congress to extend the credit again and again in its early years and to finally make it permanent in 1993. It took persistent, relentless advocacy to overcome a congressional effort to kill the credit in 1995. And, that’s what it took to nearly double its purchasing power and protect it from future inflation in 2000.
The housing credit exists today because of persistent, relentless advocacy, inside and outside the Congress. It’s around today because of the efforts of committed members of Congress, like Rep. Charlie Rangel (D-N.Y.), who fought for its creation and has been at the forefront of every effort since to preserve and strengthen it.
The housing credit turns 20 this year because of House members like Nancy Johnson (R-Conn.), Jim Ramstad (R-Minn.), Phil English (R-Pa.), Stephanie Tubbs Jones (D-Ohio), Ben Cardin (D-Md.), John Lewis (D-Ga.) and Richard Neal (D-Mass.) and senators like Orrin Hatch (R-Utah), Olympia Snowe (R-Maine), Mike Crapo (R-Idaho), Rick Santorum (R-Pa.), Max Baucus (D-Mont.), Jim Jeffords (I-Vt.) and Charles Schumer (D-N.Y.) who have stood up for it time and time again.
And, of course, we must not overlook the efforts of the congressional housing credit heroes who came before them – Dan Rostenkowski, John Danforth and George Mitchell. Without them, Congress probably would not have created the credit in the first place.
It has taken us, too – the states, developers, investors, syndicators, lenders, managers, tenant advocates, nonprofits and charitable organizations – all of us, pulling together, working together to get the housing credit to this milestone. And, it will take all of us to get it to the next one.
It will take all of us to make sure the housing credit survives these treacherous budget times and to shield it from tax reform, big or small. And, it will take all of us to put the housing credit on the best possible footing for the future.
In that spirit, the National Council of State Housing Agencies and the housing credit allocating agencies we represent call on all who share our commitment to the future of this remarkable program to join us in asking Congress to make it even better. We ask you to work with us to enact housing credit and bond modernization legislation, recently introduced by Jim Ramstad in the House (H.R. 4873) and soon to be introduced by Orrin Hatch in the Senate, to make the credit even more responsive to today’s housing needs and extend its reach to people and places it cannot now effectively serve.
This important legislation would:
- Exempt housing credit investments from the alternative minimum tax (AMT) to attract more investors and generate more construction funds;
- Permit states to provide more housing credit to properties that achieve state-determined goals, such as serving very low income families and rural and other difficult-to-develop areas;
- Allow the 9% credit for all new federally subsidized properties, except bond-financed developments not subject to the credit ceiling;
- Allow HOME-assisted properties in high-cost areas the 30% increase in eligible basis permitted all other properties;
- Encourage mixed-income housing by relaxing the rule that requires every apartment in a scattered-site property to be low-income;
- Rename the program the Affordable Housing Tax Credit to encourage community acceptance and fight NIMBYism;
- Allow Sec. 8 moderate rehabilitation properties, many of which are in desperate need of recapitalization, to receive credit financing;
- Replace the recapture bond requirement with a reporting regime to increase the efficiency and liquidity of the credit market; and
- Make technical changes to simplify the credit’s administration.
The legislation would make important changes to the housing bond programs, too, some of which would permit the more effective combination of housing credit and bond financing that occurs now in more than 40% of all housing credit deals.
Please reach out to members of Congress directly and/or through groups with which you associate – whether it is the National Association of Home Builders, the National Association of Realtors, the Mortgage Bankers Association, the National Housing Conference, the National Low Income Housing Coalition, Enterprise Communities, Local Initiatives Support Corp., or others – and ask for their help passing this critical legislation.
Even more important, make sure you and the groups that represent you are on Capitol Hill in force touting the accomplishments of this groundbreaking program in its 20th anniversary year. Only then might we have the privilege of celebrating future housing credit birthdays together.
Barbara J. Thompson is executive director of the National Council of State Housing Agencies, the national nonprofit organization committed to advancing the interests of lower-income and underserved people through the financing, development and preservation of affordable housing.