Congress Misses Affordable Housing Opportunity
It appears as if the 114th Congress will adjourn without taking action on S. 3237, The Affordable Housing Credit Improvement Act (AHCIA), a bill proposed in July by Senators Maria Cantwell (D-WA) and Orrin Hatch (R-UT). If passed, the AHCIA would increase production of affordable housing nationwide. The legislation would raise the cap on the Low Income Housing Tax Credit (LIHTC) by 50% thereby creating or preserving up to 400,000 new affordable homes over the next decade. Affordable housing financing would be more predictable as a permanent minimum LIHTC Rate of 4% for acquisition and bond financing would be established. Income averaging would be utilized for Low Income Tax Credit properties allowing more flexibility for local needs.
AHCIA also would strengthen LIHTC by streamlining credit administration and increasing the LIHTC’s ability to serve the lowest income tenants.
The legislation has received support across the board. Industry groups, including home builders, housing advocates and bankers all have advocated in favor of passage. Unfortunately, the bill has not been assigned to committee and a companion bill was not introduced in the House. Senator Hatch is the chairman of the Senate Finance Committee. Senator Ron Wyden (D-OR), the ranking member of the Finance Committee is a co-sponsor of the bill. In fact, Senator Wyden has also sponsored other housing legislation, the Middle Income Tax Credit Act of 2016. This bill is modeled after the LIHTC, but with higher income thresholds. The Middle Income Act has mixed support, and is strongly opposed by low income and affordable housing groups. But, the main point here is that with such strong leadership behind the AHCIA, the Senate’s inaction in moving the bill along makes it fairly clear that nothing will happen this Congress. The election is tomorrow and the Congress becomes a lame duck. Its remaining sessions will not be used to move new legislation to completion.
Any housing legislation that helps people afford homes and keep their homes is legislation that needs to be re-visited early in the new Congress. Senators Cantwell, Hatch and Wyden should continue to make the AHCIA a priority and re-introduce it early next year.