Legislation has been introduced to modify the qualified contract option for low-income housing tax credit (LIHTC) properties.

LIHTC developments generally must remain affordable for at least 30 years—a 15-year compliance period and a 15-year extended-use period. However, owners are permitted to pursue a qualified contract, a process that can allow properties to convert to market rate after just 15 years.

Introduced by Sens. Ron Wyden (D-Ore.), Todd Young (R-Ind.), Ben Cardin (D-Md.), and Sherrod Brown (D-Ohio), the Save Affordable Housing Act (S. 1956) seeks to eliminate the option for future projects. In addition, it would alter the statutory qualified contract price formula and require existing properties to be sold at a fair-market price.

The legislation seeks to prevent the premature loss of affordable housing and ensure that housing credit properties remain affordable for at least 30 years. Many states have set longer affordability requirements.

“The lack of affordable housing is at crisis levels in communities all over America. At a time when we desperately need to build new affordable housing, we’re losing thousands of units per year to this loophole,” Wyden said in a statement. “Saving existing affordable housing units is essential to any effort to address our housing crisis. This is a no-brainer.”

As of 2017, qualified contracts had resulted in the premature loss of approximately 50,000 units from the housing credit inventory, and each year well over 10,000 units are lost, according to the National Council of State Housing Agencies (NCSHA).

A House version (H.R. 3479) was introduced by Reps. Joe Neguse (D-Colo.), Don Beyer (D-Va.), and Jackie Walorski (R-Ind.).

The bill is also supported by several industry organizations, including NCSHA, Enterprise Community Partners, and National Housing Trust.