Senate Republicans took a stand this week that they will block debate on all legislation in the lame-duck session until the fight over the Bush-era tax cuts and an extension of government funding is resolved.
At the end of a letter to Majority Leader Sen. Harry Reid, the Republicans point out that Congress still needs to act on the “tax extenders” legislation.
The bill, S. 3793, includes several key housing provisions, including extending the low-income housing tax credit (LIHTC) exchange program for a year and the placed-in-service date for projects using the Gulf Opportunity (GO) Zone credit by two years. It also reauthorizes the New Markets Tax Credit program and funds the National Housing Trust Fund.
The fate of the extenders bill remains hard to predict. “There have been some positive developments, but at the same time there are marked differences between the parties on the issue of taxes,” said Peter Lawrence, senior policy director for Enterprise Community Partners, Inc.
Enterprise and others in the affordable housing industry have called on the Senate to pass S. 3793, which was introduced by Senate Finance Committee Chairman Max Baucus (D-Mont.) in September. Little has happened on the bill since then.
That’s troubling for many working in affordable housing.
The proposed two-year extension of the GO Zone placed-in-service date is critical, according to Lawrence. Enterprise estimates that more than 6,000 affordable homes, more than 14,000 related jobs, and $1 billion in construction activity are at risk if the Jan. 1, 2011, deadline isn’t extended.
The GO Zone credit is a resource that won’t be replaced, added Lawrence.
Affordable housing developers across the country are watching to see if the exchange program is also extended. Created under the American Recovery and Reinvestment Act, the program allows state housing agencies to swap their LIHTCs for grants to finance affordable housing.
Although the LIHTC market has improved in recent months, there are still some regions that need the exchange program to get deals done, said Lawrence.
Looking ahead to next year, a wave of new legislators will enter Congress. Educating the new lawmakers about the LIHTC program will be critical in 2011 when big program cuts are on the table, according to many developers.