It may be hard to consider, but is it possible we are entering a new age of affordable housing? I am not suggesting an end to the country’s affordable housing crisis is at hand as that would take a commitment of resources likely beyond the appetite of Congress and the Trump administration. What I am portending is an environment where affordable housing advocates in Congress propose and pass bipartisan legislation to strengthen and expand the low-income housing tax credit (LIHTC), historic tax credit (HTC), and affordable housing in general. Not since 2008 have we seen this type of commitment.
If there was a silver lining for affordable housing in the Tax Reform and Jobs Act of 2017, it was an increase in the level of awareness of the affordable housing crisis in Congress. The attempt to eliminate private-activity bonds energized and mobilized the housing community, and our advocacy efforts went on steroids to protect the program. Following that endeavor was the successful effort to secure additional LIHTC resources in the fiscal 2018 omnibus bill. What we found in our advocacy efforts around the omnibus was an appreciation for the need for more affordable housing resources with members of Congress that had previously not be outspoken supporters. How and why this occurred is the secret sauce of our advocacy efforts: grassroots outreach. But, that is a topic for another day.
What has resulted from this awareness is a series of proposals from unexpected sources that could significantly augment affordable housing into the future. Our primary piece of legislation remains the Affordable Housing Credit Improvement Act, which includes the 50% cap increase in the 9% LIHTC and the fix 4% credit floor. We continue to work with Sen. Maria Cantwell (D-Wash.) and the bills other sponsors on getting some or all of the bill acted on this year. Sen. Todd Young (R-Ind.) has introduced the Task Force on the Impact of the Affordable Housing Crisis Act, a proposal that would create a bi-partisan group to examine and respond to the affordable housing crisis. Joining Sen. Young in the effort are Sens. Cantwell, Marco Rubio (R-Fla.), Christopher Coons (D-Del., Cory Gardner (R-Colo.), Angus King (I-Maine), Doug Jones (D-Ala.), Dean Heller (R-Nev.), and Tim Kaine (D-Va.).
Sen. Kamala Harris (D-Calif.) has introduced the Rent Relief Act, a proposal that would create a refundable tax credit for renters paying more than 30% of their gross income on housing annually. Lead co-sponsors of this proposal are Sens. Dianne Feinstein (D-Calif.), Maggie Hassan (D-N.H.), and Richard Blumenthal (D-Conn.). While this proposal would not create any new housing, it would address the financial strain confronting the growing renter demographic.
Congressman James Clyburn (D-S.C.) is considering legislation that would increase the 9% and 4% credit percentages and increase the state allocations to offset the reduction in housing resources that resulted from the 21% corporate tax rate. And, Reps. Darin LaHood (R-Ill.) and Earl Blumenauer (D-Ore.), along with Sens. Bill Cassidy (R-La.) and Ben Cardin (D-Md.) introduced the Historic Tax Credit Enhancement Act in the House and the Senate. This proposal would eliminate the basis boost adjustment required when using the HTC in conjunction with other tax credits including the LIHTC, resulting in more resources for these deals. There are other proposals under consideration but not quite ready for release that may be included in this aspiring list in the near future.
And, this is only some of what is happening on the tax side of the legislative process. The fiscal 2018 budget included an over 10% increase in funding to Department of Housing and Urban Development programs, with the fiscal 2019 budget likely mimicking that trend. This includes increasing the number of units that may participate in the Rental Assistance Demonstration program from 225,000 in fiscal 2017 to 455,000 in fiscal 2018. As was demonstrated by the list of co-sponsors of LIHTC proposals by members not on tax writing committees, concern about the housing crisis is widespread throughout Capitol Hill.
While these efforts are largely bipartisan, the midterm election will have a significant impact on our chances for broad affordable housing legislation. Either way, the bipartisan enthusiasm for addressing the dearth of affordable housing bodes well and is why many of us are excited about what lies ahead.
