As Congress pursues tax reform and deficit reduction, the most successful federal program for the production and preservation of affordable housing is in the crosshairs.

While the affordable housing industry has lobbied for the low-income housing tax credit (LIHTC) for years, industry stakeholders are redoubling their efforts to educate members of Congress on behalf of the program.

What’s at stake

Industry insiders say that Rep. Dave Camp (R-Mich.), chairman of the House Committee on Ways and Means, is committed to moving forward with comprehensive tax reform.

Over the past two years, Ways and Means has conducted 20 separate hearings on comprehensive tax reform and has released a draft proposal for moving from a worldwide system of taxation to a territorial system of taxation.

Toward the end of January, Camp released a financial products discussion draft on the tax treatment of financial products and derivatives. He also announced that the committee would be holding a hearing to examine the itemized deduction for charitable contributions as part of its work on tax reform in mid-February.

The Republicans also have said they want to have the corporate tax rate at 25 percent. That would mean reviewing, cutting back, and eliminating many tax expenditures, which will put pressure on the LIHTC program, says James Miller, president of Tax Legislative Solutions, LLC, and legislative counsel for the Affordable Housing Tax Credit Coalition (AHTCC).

“They’re going forward,” says Peter Lawrence, senior director of public policy and government affairs at Enterprise Community Partners, “and we need to be prepared that we’re doing everything we can as an industry that the LIHTC is not harmed.”

Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, intends to work on tax reform and hopes to release a draft paper in the coming months. Miller says regardless of what happens in the House, the Senate will move along at its own pace and it’s more likely that the LIHTC would be included in a bill produced by the Senate Finance Committee.

“I believe that the House Ways and Means is probably where the industry needs to put much of the focus over the next several months,” he says. “We really have to make our case in the House first.”

With the heightened discussion of tax reform and the uncertainty of where it will lead, an increased emphasis is being placed on getting out the LIHTC’s message.

“When in the situation of tax reform, it’s easy for people to paint tax credits with the same brush,” says Lawrence. “We want Congress to see why it’s different and why it should remain in the tax code and why it’s the best way to incentivize affordable rental housing production. It’s the best bang that the government is getting for its dollar.”

And Miller says that even though risks are inherent to the LIHTC program in tax reform, it provides the industry with opportunities to maintain and intensify support with Democrats and continue to build support and find new champions in the Republican Party.

He adds that this comes at a time when Republicans are doing some self-examination of what they are as a party and that the LIHTC program is a prime example of Republican principles that work: “It gives power back to states, relies on private management to make it work, helps people get ahead, and supports working families.”

Taking action for the LIHTC

Leading the advocacy push is a coalition of 450 national, state, and local LIHTC stakeholders. The Affordable Rental Housing A.C.T.I.O.N. (A Call to Invest in Our Neighborhoods) was created in 2009 during the economic downturn.

The A.C.T.I.O.N. Campaign was able to go to Congress with a united voice about reinvigorating the LIHTC market. It then was instrumental in educating Congress after the 2010 mid-term elections and in the recent passage of the extension of the 9 percent floor for the LIHTC.

“We’ve been operating as a loose big tent coalition for several years,” says Lawrence. Since the Campaign’s creation, he says there have been intelligence sharing, discussions about Hill visits, and an attempt to make sure key members of Congress were being reached, but everyone still operated under their respective organizations.

“Now that we’re at a point that we believe that tax reform is going to enter a more serious phase, we need to step it up a couple of notches and become more formalized as a coalition,” he says.

Enterprise and the National Council of State Housing Agencies will co-chair the effort. The two organizations along with 15 other key stakeholders will be part of a steering committee to guide the broader group. The other steering committee members are AHTCC, Council of Affordable and Rural Housing, the Corporation for Supportive Housing, Housing Advisory Group, Housing Partnership Network, Local Initiatives Support Corp., Mercy Housing, National Association of Home Builders, National Association of State and Local Equity Funds, National Housing & Rehabilitation Association, National Housing Trust, National Multi Housing Council, Novogradac & Co., Stewards of Affordable Housing for the Future, and Volunteers of America.

The group will strive for closer collaboration, although exact details have yet to be worked out. Subcommittees have been created to focus on legislative advocacy; communications, messaging, and social media; research; and state and local outreach. And the group has been continually updating its website,, with resources for the industry.

“We’re trying to make sure we have quantifiable goals for each of those,” says Emily Cadik, a senior policy analyst at Enterprise, where she is focused primarily on the A.C.T.I.O.N. Campaign.

In coming weeks, many of the key stakeholders also will hold their annual lobby days in Washington, D.C.

Nonprofit affordable housing owner and developer Mercy Housing was planning to bring its leadership team and board of trustees to Washington at the end of February.

“Because of the confluence of events related to sequestration, cutting Department of Housing and Urban Development programs, tax reform with a possible threat to the housing tax credit, and further deficit reduction?those forces made it really compelling to make the visits now,” says Julie Gould, president of the Mercy Loan Fund and senior president of public policy and advocacy for Mercy Housing.

The nonprofit plans to meet with key members of housing and tax committees and their staffs to talk about the program. “From a practitioner point of view, we’re able to point out the community, the property, and the people. From Mercy Housing’s perspective, our mission is to have housing as a platform to lift people out of poverty. It’s more than just bricks and mortar,” Gould says.

Stephen Whyte, founder and managing director of Seattle-based Vitus Group, agrees that developers are able to offer more real-life stories of their projects and the people served, especially with those legislators on both sides of the aisle who haven’t yet chosen to stand fully behind the LIHTC program.

“Legislators are used to seeing the industry’s lobbyists and advocates, and it’s important for the housing community to put fresh faces in front of the legislators as a way to emphasize the broad appeal of the program and the participation in the program from developers throughout the country,” he says.

Whyte, along with Vitus team members Scott Langan and Makani Maeva, recently met with Sen. Richard Burr (R-N.C.), a member of the Senate Finance Committee. Vitus doesn’t have any projects in North Carolina, but Whyte says, “Sen. Burr is a key figure with respect to tax reform, and we thought it important to meet with him and his staff to emphasize the significant role of the tax credit program in creating new affordable housing throughout the country.”

Grassroots efforts

But the advocacy efforts aren’t just focused in the offices on Capitol Hill. Showcasing developments and meeting in the legislators’ districts and states have taken on greater importance to demonstrate the LIHTC program, and many developers around the nation have created strategies to engage with legislators and their staffs.

“Developers should have a goal of having every senator and member of Congress visit their properties from their districts and states,” says Gould. “Find out who they are, where they are, and invite them. Not just for a property event, but for a one-on-one tour that would include seeing the property and the services offered like computer labs, after-school programs, and day care to meet some residents. The human impact really is compelling.”

Other developers feel the same way as Gould.

Garry Watkins, president of Kentucky-based Wabuck Co., says his firm aims to continuously keep the merits of the LIHTC program before his state’s legislators since there are so many other interests vying for their attention. “Across the state, we probably have a project in every legislative district, something we’ve done that we can tell them about. If we can’t get to the legislators, we’re talking to staff pretty regularly,” he says.

The main message that Watkins says is resonating with legislators is how the program is helping people move upward in their lives. He emphasizes two specific Kentucky Housing Corp. programs: The Scholar Housing program helps to provide housing for individuals with children who want to advance their education, and Recovery Kentucky was created to help residents recover from substance abuse, which often leads to chronic homelessness.

“These are net consumers of public resources who can become net contributors [with this housing],” he says.

Dave Liette, partner and president of Ohio-based Miller-Valentine Residential Development, says his firm made a commitment to get involved with advocacy just prior to the downturn and has put some internal programs in place that have proved successful.

“We set up a process that’s built around three events that we promote advocacy with elected officials: groundbreakings, grand openings, and sponsoring fundraisers,” he says. “I personally believe grand openings are the best as far as promoting our business and the benefits of the tax credit business.”

When planning an event, Liette advises that developers go to the legislators about two months before the targeted date and see what works best for their schedules. “The earlier you get on their calendar, the better,” he says.

Then if they receive a commitment, they organize the schedule to make the most of a legislator’s short time at the property. He says his top two priorities are providing a tour of the clubhouse and a unit right when they arrive and to have residents speak at the top of the agenda.

“That really helps any person to feel the business. When you hear a senior resident or a single mom with kids get up and talk about where they were living and the opportunity of what they can live in now, it’s so emotional and very exciting,” Liette says. “People leave there saying, ‘it does have an impact on people’s lives.’ That’s what they remember.”

Miller-Valentine then follows up with a DVD of the event and a thank you for investing time coming to the project, whether it’s the congressperson or a staff member.

“Just keep contacting them. Try to get them to groundbreakings, to see projects. If you can’t make a direct contact, connect with the staff,” says Watkins. “It takes all of us working together.”