Sens. Maria Cantwell (D-Wash.) and Ron Wyden (D-Ore.) have introduced a bill that seeks to help build and preserve more affordable housing amid the COVID-19 pandemic and economic crisis.
The Emergency Affordable Housing Act includes several new proposals as well as many of the longtime changes that Cantwell has been pursuing to expand the low-income housing tax credit (LIHTC) program.
“We have an affordable housing crisis across the United States. Demand continues to grow, and our supply hasn’t kept up,” Cantwell said in a statement. “The LIHTC is a proven, successful, bipartisan tool that builds 90% of new affordable housing nationwide. The proposals in this bill will help build 500,000 units of affordable housing and give communities the resources they need to fight back against the crisis.”
The legislation also aims to help developers and operators stay afloat during the economic downturn by extending the existing two-year requirement to make rehabilitation expenditures or place a building in service following a LIHTC allocation to three years. It would also allow participants to “front load” the LIHTC credit.
According to a summary released by her office, the provision “allows the taxpayer to elect to receive a first year credit equal to 150% of the allowable amount, to be reduced pro rata in subsequent years. Eligible LIHTC buildings are those that have (1) a first year in the credit period ending between July 1, 2020, and July 1, 2022, and (2) pandemic-related construction or leasing delays that have occurred since Jan. 1, 2020, (requiring certification by the taxpayer to the housing credit agency).”
“This bill helps us isolate the issues into possible stand-alone action or inclusion in the next relief bills aimed at recovery,” says Bob Moss, principal and national director of governmental affairs at CohnReznick. “With Congress somewhat directionally impaired at this time, it is important that Sen. Cantwell did this carve-out to recognize the need that exists for the housing credit during the pandemic. “
The Emergency Affordable Housing Act, cosponsored by Sens. Michael F. Bennet (D-Colo.) and Benjamin L. Cardin (D-Md.), also seeks changes that Cantwell and other lawmakers have championed in earlier bills, including establishing a minimum 4% credit rate, making permanent the 12.5% expansion of the 9% credit passed in 2018, and increasing the credit and small-state minimum by an additional 50% phased in over 2021 and 2022.
The legislation also seeks to relax the “50% test” on bond-financed deals to 25% for two years.
In addition, it would provide a 50% larger housing credit for projects that house extremely low-income families (those with incomes below 30% of median). The larger credit would be funded from a set-aside that doesn’t count against existing spending caps. The bill would also create a separate credit within the LIHTC to fund ongoing supportive housing services, including health and mental health services, benefit coordination, job training, financial counseling, and other services needed to keep extremely low-income families in permanent housing.
Here is the legislation text.
Here is a bill summary.
