To coin one of the catch phrases of a New England football legend: “Let’s go!” As a rallying cry, it has proven effective on many occasions and is fitting as a call to action for the affordable housing industry today—especially with potentially bumpy roads ahead.
Speaking from experience, as someone engaged on behalf of the industry in efforts to secure more affordable housing resources, I can tell you these are very precarious times in Washington, D.C. Despite definitive statements by House and Senate leadership that there will not be another government shutdown, it is increasingly more likely that a budget agreement will not be reached with the administration by Sept. 30. Failure to reach a budget compromise, combined with the mandated reinstatement of budget caps called for in the Budget Control Act of 2011 (sequestration) and a conflict over raising the debt ceiling, could result in another potential fiscal cliff circa January 2013. Besides the harmful disruption to the economy, this could put a significant crimp in our efforts to increase affordable housing resources.
Putting aside the potential fiscal chaos, we have been given an opportunity to help pass the most comprehensive piece of low-income housing tax credit (LIHTC) legislation since the credit was enacted in 1986, even more robust than the Housing and Economic Recovery Act of 2008. The Affordable Housing Credit Improvement Act of 2019 (AHCIA) would not only significantly increase affordable housing resources in both the 9% and 4% programs, but it would also enact reforms that will spur development in rural areas, allowing for additional basis boosts if financially warranted. It would allow for the development of housing for veterans using the 4% LIHTC and bonds; disallow any requirement for local letters of support as part of a qualified allocation plan; and make both programs more efficient as tools to preserve existing housing.
Regarding new production, the AHCIA would increase the 9% LIHTC allocation by 50% over a five-year period. The degree to which this provision would address the growing affordable housing crisis is significant. At the end of the phase-in period, this will result in a per capita allocation of approximately $5.45 and, according to an analysis by Novogradac, result in an additional 364,000 units of affordable housing over the course of a 10-year period. The AHCIA also would create a 4% LIHTC floor, a policy goal long supported by affordable housing advocates. Conservative estimates show that this fixed rate could lead to an additional 66,000 units of affordable housing over 10 years.
We have strong bipartisan support for the legislation, including a speaker of the House and chairman of the Ways and Means Committee who wholeheartedly support the LIHTC. Chairman Richard Neal (D-Mass.) is the former lead sponsor of the AHCIA, and we are consulting his Ways and Means Committee staff on the best path forward for getting the AHCIA enacted.
The industry also has an amazing advocacy team in Washington, D.C. On June 4, the day the AHCIA was introduced in the House and Senate, the Housing Advisory Group and the Affordable Housing Tax Credit Coalition, led by Emily Cadik, held over 100 separate meetings on Capitol Hill and hosted a number of members of Congress in support of advancing the AHCIA. Both organizations are on the steering committee of the ACTION Campaign, the industry umbrella group led by the National Council of State Housing Agencies and Enterprise Community Partners. The ACTION Campaign now has over 2,200 member organizations working throughout the country in support of the LIHTC.
With that being said, we will not get the 9% increase, the 4% fixed LIHTC, or any of the other provisions in the AHCIA without the efforts of the member organizations and affordable housing practitioners across the country reaching out to their elected officials in support of the LIHTC. Nothing is more effective than your elected representatives visiting a LIHTC property, meeting tenants, learning about the program, and seeing what it accomplishes in their communities. We need strong Senate bipartisan support for S. 1073 to ensure that majority leader Mitch McConnell (R-Ky.) will take the proposal seriously. House bipartisan support for H.R. 3077 is impressive thus far, but we need a strong showing to demonstrate to House minority leader Kevin McCarthy (R-Calif.) the support the AHCIA has within his Republican conference. In short, when the horse trading begins we need to be an 800-pound gorilla in the room.
It is very difficult to predict what Congress and the administration will do regarding the myriad issues on the agenda this year. All we can do is make sure the AHCIA is in the strongest possible position for consideration once the negotiations get serious. Our success will partly hinge on whether the industry puts in the necessary effort to get it done. We have done it before, so let’s go!
