Last night Senate Finance Committee Chairman Orrin Hatch (R-UT) released a “modified chairman’s mark” — an updated version of the Senate’s tax reform legislation from which the Committee will now work — that includes several changes relevant to the Housing Credit.
The new version of the bill still retains the Low-Income Housing Tax Credit (Housing Credit) and private activity bonds, including multifamily Housing Bonds. It also adds several no-cost proposals to strengthen the Housing Credit, taken from the Cantwell-Hatch Affordable Housing Credit Improvement Act (S. 548), which would:
- Allow for a reasonable restoration period after a casualty loss (Sec. 302)
- Replace the existing nonprofit right of first refusal with a purchase option to help nonprofit sponsors keep properties affordable for the long term (Sec. 303)
- Clarify that state Housing Credit agencies have the authority to determine what constitutes community revitalization, with broad parameters, for purposes of determining whether properties are eligible for a basis boost by virtue of being located in a Qualified Census Tract and contributing to a “concerted community revitalization plan” (Sec. 307)
- Prohibit local approval and contribution requirements in order to prevent NIMBY opposition from interfering with Housing Credit development (Sec. 308)
- Require that states add a selection criteria to their Qualified Allocation Plans for housing that serves the needs of Native Americans (Sec. 401)
- Rename the Low-Income Housing Tax Credit to the "Affordable Housing Tax Credit" (Sec. 501)
See our bill summary for more information about these provisions. Because many of the other broadly-supported provisions in the Affordable Housing Credit Improvement Act would cost money (though in many cases minimally), they were not included in the modified mark due to budgetary pressures.
The bill does not, however, provide any changes to the Housing Credit to preserve its production potential in a 20 percent corporate tax rate environment. According to Novogradac & Co., absent any change to the Housing Credit, the lower corporate rate would translate into a loss of roughly 200,000 affordable rental homes over the next ten years. ACTION is strongly advocating for a modification that would preserve production levels so that the Housing Credit remains at least as robust a tool as it is today.
- Thank Chairman Hatch and other Republican members of the Senate Finance Committee for retaining the Housing Credit and Housing Bonds and for adding provisions to strengthen the Housing Credit.
- Urge your senators to communicate to Chairman Hatch and Majority Leader Mitch McConnell (R-KY) their support for the Housing Credit and Bonds, and tell them to make sure they retain these programs in the final legislation as negotiated with the House.
- Urge Republican Senators to tell Chairman Hatch he must make further changes to the legislation to sustain affordable housing production in light of the lower corporate rate.
See our Advocacy Toolkit for an updated sample letter to Senators and other resources.
If you have any questions, please contact Emily Cadik, Director, Public Policy, Enterprise Community Partners, at email@example.com or 202-403-8015, or Jennifer Schwartz, Assistant Director for Tax Policy and Advocacy, National Council of State Housing Agencies, at firstname.lastname@example.org or 202-624-7758.