The $1.9 trillion Build Back Better bill, which includes a historic investment in affordable housing, was passed by the House of Representatives today.
The sweeping proposal was approved 220 to 213, with no Republicans voting for the spending plan.
The bill, which includes several provisions to expand and improve the low-income housing tax credit (LIHTC) program, now heads to the Senate, where it is expected to be considered after Thanksgiving.
Key components of the Affordable Housing Credit Improvement Act were folded in the Build Back Better proposal, said David Gasson, principal of MG Housing Strategies and executive director of the Housing Advisory Group, earlier this week at the AHF Live conference in Chicago.
The industry got a really good bill, added Emily Cadik, executive director of the Affordable Housing Tax Credit Coalition at the conference.
The House package calls for increasing the 9% LIHTC allocation cap by 10% plus inflation each year from 2022 to 2024 when it will have risen to $3.97 per capita or a small state minimum of about $4.58 million. This amounts to about a 41% increase in credits, according to Cadik.
In 2025, the housing credit volume cap would fall back to $2.65 per capita or a small state minimum of $3.12 million.
The plan also calls for reducing the 50% bond financing test to 25% for five years. Many advocates were originally expecting that this change would be for four years, but they received an extra year with the bond test reduction proposed through 2026.
Build Back Better also includes $65 billion for public housing repairs and preservation and $15 billion for the National Housing Trust Fund, added Shannon Ross, vice president of policy at the Housing Partnership Network.
In addition, $24 billion is proposed for Housing Choice Vouchers as well as the creation of a Neighborhood Homes Tax Credit, which would help finance the construction or rehabilitation of owner-occupied homes in distressed neighborhoods.
“It’s really a robust investment in housing,” she said.
The final bill will likely be smaller than the current House version, but there’s a good chance housing will remain in it, predicted Ross.