Legislation to expand and improve the low-income housing tax credit (LIHTC) program has been introduced by a bipartisan group of legislators in both the Senate and House of Representatives.
The Affordable Housing Credit Improvement Act of 2023 (AHCIA) includes long-sought changes to the housing credit program, including increasing the amount of available credits in each state and lowering the “50% bond test.”
“Since the Affordable Housing Credit Improvement Act was first introduced in 2016, the affordable housing crisis has only worsened, and the need to take action on affordable housing is urgent,” said Emily Cadik, CEO of the Affordable Housing Tax Credit Coalition. “This important legislation will finance nearly 2 million homes nationwide at a time when rents are skyrocketing, even in many places once considered affordable. We applaud the leadership of the AHCIA’s bipartisan cosponsors and urge Congress to finally enact these bipartisan proposals this year.”
Building on earlier versions of the AHCIA, the new legislation was introduced in the Senate by Sens. Maria Cantwell (D-Wash.), Todd Young (R-Ind.), Ron Wyden (D-Ore.), and Marsha Blackburn (R-Tenn.); and in the House by Reps. Darin LaHood (R-Ill.), Suzan DelBene (D-Wash.), Brad Wenstrup (R-Ohio), Don Beyer (D-Virginia), Claudia Tenney (R-N.Y.) and Jimmy Panetta (D-Calif.). In addition to these lead sponsors, the House version of the legislation has more than 60 bipartisan original cosponsors.
Many of the provisions were in earlier versions of the AHCIA. The lawmakers say the bill will support the financing of more affordable homes by:
- Increasing the amount of credits allocated to each state: The legislation would increase the number of credits available to states by 50% for the next two years and permanently restore the temporary 12.5% increase that expired at the end of 2021—which has already helped build more than 59,000 additional affordable housing units nationwide;
- Increasing the number of affordable housing projects that can be built using private-activity bonds: The legislation calls for lowering the threshold of private-activity bond financing—from 50% to 25%—required to trigger the maximum amount of 4% credits available to properties;
- Improving the LIHTC program to better serve at-risk and underserved communities: The legislation would also make improvements to the program to better serve veterans, victims of domestic violence, formerly homeless students, Native American communities, and rural Americans.
“Across the country, the cost of housing remains too high,” said Lori Chatman, interim co-CEO of Enterprise Community Partners. “One out of four renters pays over half of their income to rent, far above the 30% considered to be affordable. Enterprise is thrilled to see a bipartisan group of legislators introduce the Affordable Housing Credit Improvement Act, which builds on the proven success of the low-income housing tax credit and would produce an additional 2 million more rental homes than would otherwise be possible over the next decade. With more than 40 years’ experience building and preserving 951,000 affordable homes nationwide, it is clear to Enterprise that there is a critical need for Congress to take up the AHCIA and move it forward.”