Senator Maria Cantwell (D-WA) and Senate Finance Committee Chairman Orrin Hatch (R-UT) introduced the Affordable Housing Credit Improvement Act of 2017 on March 7. NMHC and NAA joined the ACTION Coalition in a letter supporting the comprehensive bill that expands and strengthens the Low-Income Housing Tax Credit (LIHTC) in order to help ensure affordable housing.
Key provisions in the bill would:
- Expand the annual LIHTC allocation by 50 percent allowing for the creation or preservation of up to 1.3 million affordable homes over the next decade, 400,000 more than is possible under current law;
- Create a permanent minimum 4 percent LIHTC rate for acquisition and for Housing Bond-financed properties; and
- Permit income averaging within LIHTC properties in order to provide more flexibility and responsiveness to local needs.
Additionally, the legislation adds numerous programmatic modifications that will further strengthen the LIHTC by:
- Preserving Affordable Housing - Provides for a purchase option that will allow nonprofit and government sponsors to acquire LIHTC properties when the current 15-year compliance period expires and keep properties affordable for future generations;
- Addressing Extremely Low Income Families - These projects will be eligible to receive a 50 percent credit increase;
- Ensuring Energy Efficiency - Allows LIHTC properties to claim clean energy credits and the energy investment tax credit;
- Providing Native American Housing - Requires states to consider the needs of Native Americans when allocating the LIHTC and provides additional support to projects located in Native American areas by automatically making them eligible for an additional 30 percent credit increase; and
- Ensuring Rural Project Support - Improves the ability to serve rural areas by standardizing tenant income limit rules for projects in rural areas.
Signaling bipartisan support for the legislation, Senate Minority Leader Charles Schumer (D-NY); Finance Committee Ranking Member Ron Wyden (D-OR); and Senators Michael Bennet (D-CO), Cory Booker (D-NJ), Susan Collins (R-ME), Dean Heller (R-NV), Patrick Leahy (D-VT), Jeff Merkley (D-OR), Lisa Murkowski (R-AL), Brian Schatz (D-HI) and Todd Young (R-IN) joined as original co-sponsors.
Finally, Senator Cantwell released a report quantifying the need for additional affordable housing and a LIHTC expansion. In particular, the report concludes constrained supply, increased demand and stagnant wages are primarily responsible for the nation’s shortage of affordable housing. Sen. Cantwell’s report can be found here.