Yesterday the House approved its version of the “Tax Cuts and Jobs Act” by a vote of 227 - 205, with all Democrats and 13 Republicans voting against it. While the bill retains the Low-Income Housing Tax Credit (Housing Credit), the House did not include any changes during the mark-up that would restore private activity bonds, including Housing Bonds, nor were there changes to sustain Housing Credit production in a lower corporate tax rate environment. As written, this bill would reduce our future supply of affordable rental housing by nearly one million homes.
Yesterday the Senate Finance Committee also advanced its version of the “Tax Cuts and Jobs Act” out of committee on a party-line vote of 14 - 12. The Senate bill retains both the Housing Credit and private activity bonds and includes several no-cost provisions to strengthen the Housing Credit, taken from the Cantwell-Hatch Affordable Housing Credit Improvement Act (S. 548). While the Finance Committee did not make further modifications to the bill to address the impact of the lower corporate rate on the Housing Credit, bipartisan discussion around this issue suggests there is genuine interest in addressing the concern as the bill moves forward. However, without this change, the Senate bill would reduce the future supply of affordable rental housing by over 200,000 homes.
The House and Senate are now in recess until after Thanksgiving. We expect the Senate to consider its bill on the floor when they return to Congress the week of November 27. At this point, it is not clear whether the House and Senate will have a formal conference to resolve differences between their bills or if there will be more informal negotiations either in advance of or following Senate passage of the bill on the floor.
If House and Senate leaders decide to undertake informal negotiations over the Thanksgiving recess in advance of Senate passage, it is likely that a new version of the bill reflecting those negotiations will be considered on the Senate floor, rather than the version of the bill that cleared the Committee yesterday. The House would then be expected to take up the negotiated version of the Senate bill once it clears the Senate and pass it without further modifications.
This may be our last opportunity to influence the process before House and Senate leaders negotiate a final bill, and while the Senate bill is far better for affordable housing, congressional leaders will be under significant pressure from many different interest parties to retain various tax breaks while staying within the $1.5 trillion cost allowed by the Budget Resolution for a reconciliation bill. It is incumbent on us that we further step up our advocacy to make sure that the final bill retains both the Housing Credit and Housing Bonds, and leaves our affordable housing delivery system at least as strong as it is today.
Outreach to the Senate:
- If you have Republican Senate Finance Committee members, thank them for retaining both the Housing Credit and Housing Bonds in the legislation and for including in the bill additional provisions to strengthen the Housing Credit
- We urge everyone to also reach out to your senators, both on and off the Finance Committee and especially Republicans, and urge them to communicate to Chairman Orrin Hatch (R-UT) 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.
- Also, urge your Senators to tell Chairman Hatch and Leader McConnell to make further changes to the legislation to sustain affordable housing production in light of the lower corporate rate.
Outreach to the House:
- Thank your Republican House members for retaining the Housing Credit, but tell them that the bill as written would have a devastating impact on affordable housing by virtue of eliminating Housing Bonds. If possible give them examples of properties in their districts that would not have been built without Housing Bonds, and explain the overall impact on your state (state by state impact numbers are provided in the Novogradac links below).
- Urge your Republican House members to communicate to Ways and Means Committee Chairman Kevin Brady (R-TX) and House Speaker Paul Ryan (R-WI) their support for retaining the Housing Credit and restoring Housing Bonds in any final legislation as negotiated with the Senate.
- Urge your Republican House members to tell Chairman Brady and Speaker Ryan that Congress must sustain affordable housing production in light of the lower corporate rate.
See our Advocacy Toolkit for:
- Sample letters to Congress requesting support for the Housing Credit and Housing Bonds in tax reform
- Talking Points on Multifamily Housing Bonds
- Novogradac & Co analysis of the Tax Cuts and Jobs Act's impact on affordable housing (House and Senate), including the impact of the House tax reform bill and the Senate tax reform bill in each state
- The ACTION Campaign statement on the Tax Cuts and Jobs Act
We will not be holding the monthly ACTION Campaign call that would have fallen on Friday, November 24, but 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.