Today the Obama Administration released its FY 2017 budget request, which demonstrated a continued commitment to expanding and strengthening the Housing Credit. The Administration notes that the “agencies in charge of allocating [Housing Credits] are often confronted with a larger number of deserving projects than they can support,” and that expanding the Housing Credit “would allow the development of some projects for which the current supply is insufficient.” The ACTION Campaign strongly agrees that an expansion of the Housing Credit is needed for these reasons and more.
Five Housing Credit proposals were carried over from previous budgets. There is only one entirely new proposal for FY 2017, related to affirmatively furthering fair housing. One proposal from the FY 2016 budget, related to modifying the Housing Credit rate formula, was not included in FY 2017. The tax extenders legislation passed at the end of 2015, which made permanent the minimum 9 percent Housing Credit rate for new construction and substantial rehabilitation, addressed the need for an alternate credit rate formula for this type of credit.
The Administration proposes to:
- Expand the Housing Credit through PAB conversion
- Allow income averaging in Housing Credit properties
- Add fair housing as an allocation preference (new proposal)
- Add preservation as a selection criteria
- Remove the QCT population cap
- Protect victims of domestic abuse