A bill that would expand the low-income housing tax credit (LIHTC) program has gained the support of 151 representatives and 26 senators in under three months, reports the Affordable Housing Tax Credit Coalition (AHTCC).
“With one-third of Congress supporting this bill on a bipartisan basis, the momentum behind this legislation is driven by a compelling show of support,” said AHTCC CEO Emily Cadik. “This demonstrates to members across the political spectrum that the AHCIA [Affordable Housing Credit Improvement Act] is a well-vetted, viable solution to address a problem that impacts states and districts across the country.”
The AHCIA of 2023 builds on prior versions of the bill that have earned widespread bipartisan support since 2016. In recent years, key provisions have been enacted, including a measure to make the housing credit more compatible with energy and solar tax credits, a minimum 4% housing credit rate, a 12.5% credit allocation increase, and an “income averaging” option to provide more program flexibility.
LIHTC supporters say additional changes are still needed to address the nation’s affordable housing crisis.
The latest legislation (H.R. 3238 and S. 1557) includes a proposal to lower the private-activity bond financing threshold—from 50% to 25%—required to trigger the maximum amount of 4% housing credits available to a property. It would also expand the LIHTC by restoring the 12.5% cap increase that expired at the end of 2021 and further increase resources by 50%. The AHCIA would also provide states with additional flexibilities, streamline program rules, and make the housing credit more effective in rural and Native American communities.
“Past Congresses have taken major steps to address a national housing crisis that has only become more severe in recent years,” said Ryan Sfreddo, president of the AHTCC board of directors and CEO of Red Stone Equity Partners. “However, key provisions of the AHCIA that would have the greatest impact on affordable housing production are still in need of enactment, including an urgently needed increase to the housing credit allocation. It is time for Congress to unlock additional resources to allow for thousands of shovel-ready developments to move forward.”
It's estimated that over 10 years the AHCIA would finance nearly 2 million more affordable rental homes than otherwise possible.
