Sen. Sheldon Whitehouse has introduced legislation that will more than triple the size of the low-income housing tax credit (LIHTC).

The bill also seeks to lower the private-activity bond threshold for the rehabilitation credit from 50% to 15% and extend the required affordability period for LIHTC buildings to 50 years, according to the Democrat from Rhode Island.

“Rhode Island families, who have gotten squeezed by skyrocketing rents in recent years, are among the hardest hit by the nationwide affordable housing supply crunch. My legislation is aimed at bringing down rents by increasing the supply of affordable rental homes in the Ocean State,” Whitehouse said in a statement. “In combination with my proposal to create a refundable first-time homebuyer tax credit, we can help ensure more Rhode Islanders have a safe, stable place to call home and a solid foothold in the middle class.”

Sen. Jack Reed (D-R.I.) is a cosponsor of the Affordable Housing Construction Act.

According to Whitehouse, the new bill would:

  • Make permanent the temporary 12.5% boost to the LIHTC program that recently expired;
  • Triple the LIHTC state allocation of $2.90 per capita to $9.79 and triple the small state minimum from $3.36 million to $11.34 million, beginning in 2025; and
  • Set aside one-third of each state allocation for boosts to projects that meet special requirements, such as paying a prevailing wage, using renewable energy sources, proximity to public transportation, providing accessible units, or allocating at least 20% of the units for extremely low-income renters.

Whitehouse, chairman of the Senate Budget Committee, is also a cosponsor of the Affordable Housing Credit Improvement Act (AHCIA), which has been a priority of affordable housing leaders and also seeks to expand the LIHTC program.

“We’re very happy to have his support for expanding affordable housing and look forward to working with him on this bill as well as the AHCIA as we try to increase the supply of affordable housing,” says David Gasson, a principal at MG Housing Strategies.

Affordable housing leaders are still looking at the new bill to understand its impact. One conversation is about what would happen to the market if there is a big jump in the amount of available credits. A surge in credits could potentially disrupt the supply-and-demand balance and make prices fall. They'll also be looking at what a longer affordability period may mean for participants. In addition, LIHTC supporters continue to think about ways to attract new investors to the program.

The Affordable Housing Construction Act is one of several affordable housing bills to be introduced this year. Sen. Tina Smith (D-Minn.) and Rep. Alexandria Ocasio-Cortez (D-New York) recently unveiled The Homes Act that calls for building or preserving as many as 1.3 million homes across the country.