Senate Tax Reform Bill Retains Housing Credit and Housing Bonds
Yesterday Senate Finance Committee Chairman Orrin Hatch (R-UT) introduced the Senate’s version of the “Tax Cuts and Jobs Act,” with significant differences from the House’s version released last week. The Senate bill would:
- Retain the Low-Income Housing Tax Credit (Housing Credit), with no changes.
- Retain private activity bonds, including multifamily Housing Bonds, which provide critical financing to more than half of all Housing Credit developments.
- Lower the corporate tax rate from 35 to 20 percent, effective in 2019. Neither the House nor the Senate bill makes any adjustments to sustain Housing Credit investment in light of the lower corporate rate.
We thank Senate Finance Committee Chairman Orrin Hatch (R-UT) for rejecting the House tax reform bill’s elimination of private activity bonds – a proposal that would devastate affordable housing – and urge him to hold firm on this issue as this process progresses. We also call on Senator Hatch to make adjustments to the Housing Credit to offset the impact of the lower corporate tax rate on Housing Credit investment when he releases his modified “chairman’s mark,” prior to the Committee’s mark-up.
The Senate is expected to begin marking up its legislation Monday afternoon, and we are encouraging Republican Senators to weigh in with Chairman Hatch to express their support for the retention of both the Housing Credit and private activity bonds, and to support maintaining the productivity of the Credit in a lower corporate tax rate environment.
House Advances Tax Reform Bill Without Needed Improvements
Yesterday the House Ways and Means Committee also advanced its version of the Tax Cuts and Jobs Act on a party-line vote. The House version of the bill would retain the Housing Credit with no adjustments, but would devastate affordable housing production by eliminating the tax exemption on private activity bonds, including multifamily Housing Bonds.
While some changes to the bill were made during mark-up, none would reverse the bill’s harmful impacts on affordable housing – an estimated reduction of nearly one million affordable homes over the next decade. Though changes are still possible to the House bill, our best opportunity to impact the final outcome remains with the Senate. Still, advocates should capitalize on any opportunity to impact the House process by weighing in with House Republicans to urge them to speak out against the elimination of Housing Bonds and urge them to express their concerns to House Speaker Paul Ryan (R-WI) and Ways and Means Committee Chairman Kevin Brady (R-TX). This will help us position ourselves for upcoming negotiations between the House and Senate. Specifically tell your House members they must:
- Retain multifamily Housing Bonds; and
- Make adjustments to offset the impact of a lower corporate rate on Housing Credit investment to ensure that the amount of Housing Credit equity per development is not substantially decreased.
See the ACTION Campaign statement on behalf of over 2,150 organizations and businesses calling on Congress to make these changes.
Reach out to Republican Senators to:
- Thank them for retaining both the Housing Credit and Housing Bonds and urge them to tell Chairman Hatch to hold his ground by ensuring these programs are retained in a final bill; and
- Ask that they convey support to Chairman Hatch for retaining the production power of the Housing Credit in a lower corporate rate environment.
Reach out to Republican Representatives to:
- Ask that they convey support to Speaker Ryan and Chairman Brady for Restoring multifamily Housing Bonds; and
- Ask them to tell Speaker Ryan and Chairman Brady that they must also retain the Housing Credit's production power in a lower corporate tax rate environment.
While we will continue to look for opportunities to advance the proposals in the Affordable Housing Credit Improvement Act through tax reform or other legislation, our most pressing priority in tax reform is preserving both the Housing Credit and Housing Bond programs, and sustaining Housing Credit investment.
Visit the ACTION Campaign website for more information and advocacy materials, including:
- Talking Points on Multifamily Housing Bonds
- Novogradac & Co. analysis of the Tax Cuts and Jobs Act’s impact on affordable housing and state-by-state estimates
- Sample letters to Congress requesting support for the Housing Credit and Housing Bonds in tax reform
If you have any questions, please contact Emily Cadik, Director, Public Policy, Enterprise Community Partners, at firstname.lastname@example.org or 202-403-8015, or Jennifer Schwartz, Assistant Director for Tax Policy and Advocacy, National Council of State Housing Agencies, at email@example.com or 202-624-7758.