Reps. Pat Tiberi (R-Ohio) and Richard Neal (D-Mass.), Ways and Means Committee ranking member, introduced legislation Tuesday to strengthen the low-income housing tax credit (LIHTC).
“With the introduction of the Affordable Housing Credit Improvement Act in both the House and Senate, the LIHTC is poised for its greatest expansion in over a decade,” says David Gasson, executive director of Housing Advisory Group and vice president at Boston Capital. “Pending our ongoing efforts around tax reform, if the affordable housing industry can muster support from their representatives in Congress for this legislation, we could be positioned to dramatically alter the housing landscape for years to come.”
The bipartisan, comprehensive House bill would allow states more flexibility, aid LIHTC development in challenging markets, increase the ability to serve extremely low-income households, support the preservation of existing affordable housing stock, and establish a minimum 4% rate for credits used to finance acquisitions and housing bond–financed developments.
However, the House bill has one key difference from its Senate counterpart. H.R. 1661 does not include the 50% cap increase of the annual housing credit authority phased in over five years.
The ACTION Campaign—a coalition of over 2,000 national, state, and local organizations and businesses working to protect and expand the LIHTC—fully endorses the legislation but plans to continue to encourage the inclusion of a cap increase in any final tax legislation that advances through Congress.
“Some folks in the affordable housing community might be disappointed that it’s not included, but in my judgment, having strong bipartisan support is the best way to further an expansion of the housing credit,” says Peter Lawrence, director of public policy and government relations for Novogradac & Co. “I think the lack of any legislation is far worse than having legislation that has practically everything, except for the 50% allocation increase.”
At introduction, the bill had 16 other co-sponsors, including 13 Ways and Means members: Earl Blumenauer (D-Ore.), Joseph Crowley (D-N.Y.), Carlos Curbelo (R-Fla.), Danny Davis (D-Ill.), John Faso (R-N.Y.), John Katko (R-N.Y.), Mike Kelly (R-Pa.), Patrick Meehan (R-Pa.), Gregory Meeks (D-N.Y.), Bill Pascrell (D-N.J.), Erik Paulsen (R-Minn.), David Reichert (R-Wash.), James Renacci (R-Ohio), Linda Sanchez (D-Calif.), Jason Smith (R-Mo.), and Mike Thompson (D-Calif.).
Lawrence added that many in the affordable housing industry also are concerned about what’s happening in the marketplace right now due to potential tax reform, with LIHTC investors pulling back and housing credit pricing falling.
“I think one thing that we want to make sure that folks are aware of is that we have heard from both Ways and Means and the Senate Finance Committee that they are interested in considering some form of compensating proposal if Congress moves forward with tax reform to make other changes in the tax code to ensure we have the same level of investment and production as before the corporate tax rates are lowered,” Lawrence says. “I feel cautiously optimistic that when that tax legislation is advancing that we will be able to get some form of compensating proposal in that.”