Provisions to Strengthen and Expand the Housing Credit Estimated to Increase Affordable Housing, Jobs Nationwide
The ACTION Campaign continues to thank Congress for making a significant down payment on Housing Credit resources by temporarily expanding the Credit and enacting the new permanent option for income averaging in March's omnibus spending package. According to analysis from Novogradac & Company, the temporary 12.5 percent increase in Housing Credit allocation authority, effective for four years (2018-2021), is estimated to produce an additional 28,400 affordable rental homes over the next ten years, as well as 32,000 jobs, roughly $2.7 billion more in business income and more than $1 billion in additional federal, state and local tax revenue. Novogradac & Company also provides an estimate of the number of affordable rental homes and jobs that each state would gain as a result of this temporary expansion. Additionally, the new option for income averaging provides greater flexibility and potential for income-mixing in Housing Credit developments, making it possible to provide a deeper level of affordability than was previously available.
See our overview of Housing Credit Victories in the Consolidated Appropriations Act of 2018 for more information.
However, while these provisions are a major step forward, the increase does not fully make up for the estimated 235,000 affordable rental homes that will not be produced over the next ten years resulting from reduced Credit pricing due to the lower corporate income tax rate enacted in the Tax Cuts and Jobs Act.
ACTION is committed to advancing the remaining provisions of the Affordable Housing Credit Improvement Act to meet the vast and growing need for affordable housing nationwide. Visit the ACTION Campaign's Advocacy Toolkit for advocacy resources to support the Housing Credit and the Affordable Housing Credit Improvement Act.
Over One-third of the House Supports Strengthening the Housing Credit
The Affordable Housing Credit Improvement Act has continued to gain support following the provisions to strengthen and expand the Housing Credit that were enacted in March. Over one-third of the House has now signed on to support the Affordable Housing Credit Improvement Act (H.R. 1661) to strengthen the Housing Credit, a tremendous display of support that is a testament to strong congressional champions and the grassroots advocacy network through the ACTION Campaign. New co-sponsors include Rep. Luis Gutierrez (D-IL-4), Rep. Fred Upton (R-MI-6), Rep. Jared Huffman (D-CA-2), Rep. Scott Peters (D-CA-52) and Rep. Mike Quigley (D-IL-5), bringing total co-sponsorship in the House to 147 members, with 78 Democrats and 69 Republicans. The Senate bill (S. 548) has 39 co-sponsors, with 27 Democrats, ten Republicans and two Independents.
Invite Your Representatives to Tour Local Housing Credit Properties
ACTION encourages all Housing Credit stakeholders to invite elected officials to tour Housing Credit properties and attend grand openings when members of Congress are home in the state or district this summer. Site visits are a powerful tool to show the impact of the Housing Credit on residents and the community. Sample language for contacting member offices about a site visit can be found in our Advocacy Toolkit, along with other resources for promoting the Housing Credit.
All States to See Increases in Housing Credit Ceiling and Bond Cap in 2018
The IRS recently reported that the U.S. population grew by 0.8 percent last year, meaning that all states will see an increase in 2018 Housing Credit ceiling and tax-exempt private activity bond (PAB) cap. In addition to the population increase, the 12.5 percent expansion of 9 percent Housing Credits included in the omnibus will provide states with even greater tax credit allocations in 2018. According to Novogradac & Company, the increase in the per-capita amount to $2.70 and the small state minimum to $3.105 million means that even states that lost population but do not qualify for the small state minimum will still see an increase in their Housing Credit and PAB cap this year.
Treasury Recommends Modernizing the Community Reinvestment Act
Last month the Treasury Department released a memorandum with findings and recommendations to modernize the Community Reinvestment Act (CRA). CRA was enacted in 1977 with the goal of encouraging banks and other depository institutions to meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods. Banks can receive positive CRA credit for investing in the Housing Credit. The Office of the Comptroller of the Currency (OCC), the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) – collectively, the banking regulators – are responsible for carrying out any regulatory reforms and will be reviewing Treasury’s recommendations. OCC is also expected to release an advance notice of proposed rulemaking on CRA in the coming weeks. ACTION will be closely monitoring any proposed changes to the CRA because of its potential impact on the Housing Credit investor market. Stay tuned to our blog for additional information.