On January 12, Dr. Ben Carson appeared before the Senate Banking Committee for consideration to serve as HUD Secretary. Though the Housing Credit is not under HUD’s jurisdiction, it was raised numerous times in a positive light given its significant role and successful track record in providing affordable housing to our nation’s low-income families.
Dr. Carson expressed strong support for public-private partnerships, and specifically cited the Housing Credit as a successful example of the private sector’s role in affordable housing. “We’ve got a lot of very talented people in this country in the private sector… You know the Low-Income Housing Tax Credit is an excellent example – it’s overseen by the Senate Finance Committee – but that has allowed an enormous number of places to be renovated,” Dr. Carson said. “I want to study those programs that are working so we can multiply them across the country.”
He also elaborated that government must provide the motivation for the private sector to make such investments, saying, “they have to obviously be incentivized in order to do that – the big stumbling block is the initial capital in order to get it done,” and noted that the private sector must “realize a return on that capital investment.” Securing initial development capital and ensuring a return on investments, the two principles to which Dr. Carson refers, are foundations of the Housing Credit model and are important considerations as Congress considers tax reform legislation.
Senate Banking Committee Chairman Mike Crapo (R-ID) indicated his strong support for the Housing Credit during the hearing as well. “While the Low-Income Housing Tax Credit is under the Finance Committee’s jurisdiction,” Chairman Crapo said in his opening statement, “it is very important to the U.S. housing market. It provides essential capital to underserved communities and provides key financing for small and rural affordable housing developments.”
On January 19 Steven Mnuchin appeared before the Senate Finance Committee for a hearing to consider his nomination to serve as Treasury Secretary. Comprehensive tax reform was raised by Mnuchin and members on both sides of the aisle as a top priority, and there was bipartisan interest in bringing American profits back to the U.S. from overseas and eliminating loopholes that allow American businesses to avoid U.S. tax laws. Though there was little discussion of specific tax reform proposals, several Republican members called for significant reductions in corporate tax rates and simplification of the tax code in order to make U.S. businesses more competitive, and numerous Democrats called for a commitment to preserve tax expenditures that benefit low- and moderate-income families and promote fairness through the tax code.
Though Neither the Housing Credit nor Housing Bonds were mentioned during the hearing, these topics were included in questions for the record submitted by several Finance Committee members. Ranking Member Ron Wyden (D-OR) and Senator Maria Cantwell (D-WA) asked for Mnuchin’s position on the Housing Credit specifically, and Senator Dean Heller (R-NV) asked what the Administration would do to encourage the development of affordable housing, but Mnuchin only committed to reviewing the Housing Credit and other affordable housing programs without expressing support for specific programs. Senator Sherrod Brown (D-OH) asked about specifically about private activity bonds, to which Mnuchin responded, “private activity bonds are a valuable way to incentivize private investment in America’s infrastructure” and suggested that “there are areas where we can improve private activity bonds, including changing volume caps for certain types of projects.”