How far we have come. When I consider the current political disposition of the low-income housing tax credit (LIHTC) and affordable housing in general, I can’t help but think back to our industry efforts almost 20 years ago, when a much different Congress was contemplating ending the tax credit program. Back then, our House champion, Congresswoman Nancy Johnson (R-Conn.), and four of her Republican colleagues on Ways and Means stood up for the LIHTC and beat back the sunset effort by then-chairman Bill Archer (R-Texas). It was a significant victory for an industry just getting its advocacy legs underneath it, which led to our subsequent success—an increase in the LIHTC credit cap.
Spring forward to today, and you find an advocacy machine that’s cultivated congressional support that includes a majority of Ways and Means Republicans and Democrats and the chairpeople and ranking members of both tax-writing committees. Where once our industry found itself fighting for the very existence of the LIHTC, we now work with Republican leadership on how to strengthen and build upon the program.
Perhaps the most specific example of how far we’ve come was the support for the LIHTC by former Speaker of the House John Boehner (R-Ohio), who had not only spoken eloquently about the impact of the program on his constituents but also had a grasp of the social and economic effect of affordable housing. His support meant much to our recent successes, which is why the environment that led to his expedited resignation gives us reason for concern.
Although we celebrate the success we’ve had in advocating for the LIHTC, while keeping an eye on pending tax reform, we’re very concerned about the appropriated programs that work in tandem with the tax credit and without which the production and rehabilitation of affordable housing would be almost impossible.
The departure of Speaker Boehner is significant in that support within the Republican conference, at a time of continued budget cutting, is pivotal to our efforts to sustain and restore much-needed funding for HOME, Sec. 8, Community Development Block Grants, and the other programs that make up a significant portion of affordable housing support.
This funding is part of the discretionary spending in the budget that includes defense and nondefense programs. In 1965, the discretionary portion of the budget was 66% of all spending. In 2014, this portion of the budget was down to 33%, and projections have it declining to 24% in 2024.
Magnifying the cuts in discretionary funding is sequestration, which resulted from the Budget Control Act of 2011. If not repealed, the body blow of sequestration, in combination with the “Washington has a spending problem” mentality, could render our impressive industry advocacy mute as we see resources for housing and community development further whittled away.
Our industry as a whole must convince Congress it has pierced the floor of support for housing and that the public side of our public–private partnership must restore, if not increase, its investment in their communities.
David Gasson is executive director of the Housing Advisory Group and vice president and director at Boston Capital.