May 11, 2023
Bicameral, Bipartisan Legislation Introduced to Increase Low-Income Housing Tax Credit (LIHTC) Funding
Members of the House and Senate on May 11 introduced bipartisan legislation to expand the Low-Income Housing Tax Credit.
What This Means: While the House and Senate versions of The Affordable Housing Credit Improvement Act of 2023 are not identical, both would:
- expand the 9 percent credit by restoring the 12.5 percent increase in credit authority that expired at the end of 2021 and further augment credit authority by 50 percent; and
- enhance the use of existing private activity bond authority by reducing the bond financing threshold to maximize 4 percent credits to 25 percent from 50 percent.
Why This Matters: Estimates indicate that the key unit financing provisions in the bills could finance up to 1.94 million additional affordable homes over 10 years.
NMHC's Viewpoint: NMHC strongly supports this legislation and will be working with The ACTION Campaign and other stakeholders to encourage Congress to include its provisions in any moving tax legislation.
Next Steps: Congress could consider legislation later this year that would address the child tax credit and certain business tax incentives. We are also supporting other proposals in the tax space to boost housing supply, including those that would establish a middle-income housing tax credit and provide a tax incentive to convert underutilized commercial buildings into rental housing.