The gains we have seen for affordable housing in just the past three months show that policymakers are recognizing how desperate the need for affordable housing has become. With over 10 million households paying more than half of their income toward rent even before the pandemic, and now nearly 9 million households behind on rent, the substantial resources and tools Congress deployed to address the growing need could not have come soon enough.

Emily Cadik
Emily Cadik

Since December of last year, Congress has enacted a permanent 4% low-income housing tax credit rate—a longstanding priority for the affordable housing industry that had become increasingly urgent during the pandemic—and authorized nearly $70 billion in emergency housing resources as part of the 2020 year-end COVID-19 relief bill and the subsequent American Rescue Plan. These were critical first steps, but much more needs to be done. Though infusions of resources of this magnitude are usually few and far between, we have a very real opportunity in the next few months to do even more to tackle the affordable housing crisis.

Today, our longtime housing credit champions reintroduced the Affordable Housing Credit Improvement Act (AHCIA) in the House and Senate, with bipartisan support. We have been advocating for this comprehensive, bipartisan legislation for several years now, which provided the foundation for the enactment of the minimum 4% housing credit rate, as well as the temporary 12.5% increase in housing credit allocation and the income-averaging flexibility in 2018. But over two dozen provisions are still urgently needed, as well as several provisions that have been added or updated.

One of the key changes in this year’s version of the AHCIA would allow more efficient use of increasingly scarce private-activity bond resources by lowering the bond financing threshold required to access 4% housing credits. Reducing the threshold from the current 50% to 25% would significantly increase the amount of housing that can be built or preserved. According to Novogradac & Co., this change alone could finance nearly 1.5 million more affordable homes over the next decade. Another key change is the rate at which the AHCIA proposes to expand the housing credit. While in previous years we advocated to increase the annual housing credit allocation by 50% over five years, we now recognize that the growing need for affordable housing development—and the jobs and economic activity it would generate—warrant a two-year phase-in.

Another key difference this year is that there is a very clear path forward to enact more provisions of the AHCIA. With their top priority of providing additional COVID-19 relief behind them, Congressional leadership and the White House are focused on infrastructure and economic recovery legislation, which could include substantial investments in affordable housing. President Biden’s newly released outline of the American Jobs Plan calls for “a marked increase in the resources available through the low-income housing tax credit and other housing incentives.”

There is similarly strong support for the housing credit in Congress. The infrastructure bill that passed the House last summer, the Moving Forward Act, included roughly a dozen provisions to expand and strengthen the housing credit, and House Ways and Means chairman Richard Neal has already stated that he would like to see “a transformative expansion” of the housing credit as part of an infrastructure package. Other key leaders in this negotiation are steadfast housing credit supporters as well—Senate Finance Committee Chairman Ron Wyden (D-Ore.), Majority Leader Chuck Schumer (D-N.Y.), House Speaker Nancy Pelosi (D-Calif.), and Senate Finance Committee Ranking Member Mike Crapo (R-Idaho).

Meaningful steps to address the nation’s affordable housing crisis are more possible this year than they have been for many years, and it is up to us as advocates to take advantage of the opportunity to make this a truly watershed year for affordable housing. For decades, the affordable housing community has been building congressional support for the housing credit through the work we do best: sharing the impact of the housing credit through groundbreakings, ribbon cuttings, property tours, and direct advocacy. Our work led more than one-third of the last Congress to co-sponsor the AHCIA in less than six months, and our challenge today is to build even broader support even faster, recognizing that infrastructure legislation is already under development. We must mobilize our housing credit supporters in Congress to get the AHCIA across the finish line this year.