Should Congress modify and expand low-income federal housing tax credits?
This bill revises provisions of the low-income housing tax credit and renames it the affordable housing credit. Additionally, it modifies the credit to increase state allocations of the credit; repeal the qualified census tract population cap; prohibit local approval and contribution requirements; increase the credit for certain projects designated to serve extremely low-income households; increase the credit for certain bond-financed projects designated by state agencies; eliminate the basis reduction for properties that receive certain energy-related tax benefits; and increase the population cap for difficult development areas (i.e., areas with high construction, land, and utility costs relative to area median gross income).
Sponsor: Rep. Suzan K. DelBene (Democrat, WA, District 1)
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Opponents say
• "The Trump administration and Republicans in Congress are considering major tax reforms aimed at reducing tax rates and ending unjustified tax breaks. They should consider repealing the LIHTC. It complicates the tax code and is a poorly targeted solution to housing affordability problems. Instead of federal subsidies, a better way to reduce housing costs would be through state and local policy reforms. The states should reduce the burden of building and zoning regulations to increase the supply of housing, including multifamily housing for low-income tenants." Source: The Cato Institute
Proponents say
• "Our nation's need for more affordable housing is at an all-time high because of the COVID-19 pandemic. Congress should leverage the proven success of the Housing Credit to build more affordable housing units that will help more families find a safe place to call home. This legislation has earned the support of a bipartisan majority of the House of Representatives in the past. Now it's time to get it over the finish line and increase affordable housing production across the country." Source: Rep. DelBene (Democratic, Washington, District 1)
• "For more than 30 years, the Low Income Housing Tax Credit (Housing Credit) has been a model public-private partnership program, bringing to bear private-sector resources, market forces, and state-level administration to finance nearly 3.5 million apartments. Since 1986, the Housing Credit program has provided approximately eight million low-income families, seniors, veterans, and people with disabilities homes they can afford. Virtually no affordable rental housing development would occur without the Housing Credit." Source: National Council of State Housing Agencies
