Omnibus Bill to Expand, Strengthen Housing Credit

Today Congress agreed to an omnibus spending bill, which includes two key provisions from the Affordable Housing Credit Improvement Act (S. 548/H.R. 1661):

  • A 12.5 percent increase in Housing Credit allocation for four years (2018-2021), and
  • Income averaging, on a permanent basis after enactment of this billwhich would allow the 60 percent AMI ceiling to apply to the average of all apartments in a project rather than each individual Housing Credit apartment. 

The House and Senate must now vote to pass this omnibus bill before government funding runs out on Friday, March 23.

The inclusion of these provisions is a testament of the tireless advocacy efforts of ACTION Campaign members over many years, and the strong bipartisan support we have built for the Housing Credit and this legislation. Since the Affordable Housing Credit Improvement Act was first introduced in 2016, nearly one-third of Congress has signed on. Thank you to everyone who contributed to these efforts.

These provisions come at a critical time, with more than 11 million households paying more than half of their income in rent. In addition, as a result of the lower corporate tax rate recently enacted through the Tax Cuts and Jobs Act, we had been expecting Housing Credit equity to decline by roughly 14 percent. The increase in resources and new flexibilities authorized in the omnibus will go a long way towards sustaining and even increasing Housing Credit production.

We would like to thank Senator Maria Cantwell (D-WA), Senate Finance Committee Chairman Orrin Hatch (R-UT), Representative Carlos Curbelo (R-FL), former Representative Pat Tiberi (R-OH), and House Ways and Means Ranking Member Richard Neal (D-MA) for their leadership, as well as the more than 160 members of Congress who have shown support for this legislation.

While there are many other important provisions in the Affordable Housing Credit Improvement Act that we will continue to seek to advance, the enactment of these key provisions is a critical step. 

Urgent Action Needed to Expand and Strengthen Housing Credit in Omnibus

Congress is currently negotiating an omnibus spending bill, which is likely to include a tax component, and needs to pass on or before March 23 when the current continuing resolution expires. This bill may be the last potential vehicle for the Affordable Housing Credit Improvement Act for quite some time, and opportunities will be few and far between as we get closer to the midterm elections later this year. There will be a lot of competing interests vying to be part of what could be the last major piece of legislation for a while, so outreach over the coming days is critical to make sure our Housing Credit legislation rises to the top of the priorities list. 

Advocacy Message

  • Ask all Republican co-sponsors of S. 548 to reach out to Majority Leader Mitch McConnell (R-KY) and urge him to enact S. 548 in the tax package that could move with the omnibus.
  • Ask all Democratic co-sponsors of S. 548 to reach out to Minority Leader Chuck Schumer (D-NY) to make sure our bill is a Democratic priority in their negotiations with Senate Republicans. We also encourage you to reach out to the following Democrats, who are in the queue waiting to be added to S. 548, and urge them to share their support with Sen. Schumer:
    • Sen. Cortez Masto (D-NV)
    • Sen. Reed (D-RI)
    • Sen. Carper (D-DE)
    • Sen. Nelson (D-FL)
    • Sen. Casey (D-PA)
    • Sen. Duckworth (D-IL)
    • Sen. Hirono (D-HI)
    • Sen. King (I-ME)
    • Sen. Coons (D-DE)
    • Sen. Feinstein (D-CA)
    • Sen. Whitehouse (D-RI)
    • Sen. Cardin (D-MD)
    • Sen. Stabenow (D-MI)
    • Sen. Heitkamp (D-ND)
    • Sen. Markey (D-MA)
    • Sen. Menendez (D-NJ)
    • Sen. Gillibrand (D-NY)
    • Sen. Klobuchar (D-MN)
  • Ask all Republican co-sponsors of H.R. 1661 to reach out to House Ways and Means Chairman Kevin Brady (R-TX) and Speaker Paul Ryan (R-WI) and tell them they support enactment of H.R. 1661 as part of the omnibus.
  • Ask all Democratic co-sponsors of H.R. 1661 to reach out to Minority Leader Nancy Pelosi (D-CA) to make sure H.R. 1661 is a Democratic priority in negotiations with Republicans about tax provisions in the omnibus.

There are eight new co-sponsors on the House version of the bill, bringing total co-sponsorship on H.R. 1661 to 135 representatives, including 68 Democrats and 67 Republicans. New co-sponsors include Rep. Dina Titus (D-NV-1), Rep. Gene Green (D-TX-29), Rep. Mike Coffman (R-CO-6) , Rep. Tom Reed (R-NY-23), Rep. Dwight Evans (D-PA-2), Rep. Tim Ryan (D-OH-13), Rep. John Yarmuth (D-KY-3), and Rep. Sam Graves (R-MO-6). We encourage you to thank these members for their support and urge them to weigh in with House leadership immediately. 

You may wish to use the following talking points:

  • Thank you for your support of the Affordable Housing Credit Improvement Act. As you know, this legislation includes common-sense reforms to make the Housing Credit and Housing Bonds more streamlined and flexible. The Senate version of the legislation also includes a 50 percent increase in Housing Credit resources, which we are calling on both the House and Senate to adopt. This increase in resources would finance approximately 400,000 more affordable homes over the next decade than would otherwise be possible.
  • [For Republican offices only]: The affordable housing community applauds Congress for retaining the Low-Income Housing Tax Credit (Housing Credit) and tax-exempt multifamily Housing Bonds in tax reform. Together, these two programs finance virtually all affordable housing built and preserved in the United States. However, our work is not done.
  • There is a growing need for affordable housing that vastly exceeds the supply we are able to produce with limited resources currently available to us. There are more than 11 million households who pay more than half of their income on rent, and this number is expected to increase unless we act now. (See our state fact sheets for data on the affordable housing shortage in each state.)
  • We understand that the omnibus spending bill currently being negotiated is likely to have a tax component, and may be the last potential vehicle for advancing the Affordable Housing Credit Improvement Act for quite some time.
  • We ask that you reach out to [member of leadership – see above] urging them to include the Affordable Housing Credit Improvement Act in the omnibus.

Housing Credit Advocacy Critical While Congress Negotiates Omnibus Package

We are continuing to advocate to include the Affordable Housing Credit Improvement Act in the next tax legislation that Congress advances. Earlier this month, there was bipartisan support for including provisions of the Affordable Housing Credit Improvement Act in the deal that was struck on tax extenders, the continuing resolution and the budget caps. While it was not ultimately included in the final legislation, it showed major progress and momentum for the Housing Credit. The bill’s sponsors in the Senate, Senator Maria Cantwell (D-WA) and Senate Finance Committee Chairman Orrin Hatch (R-UT), are highly motivated to advance the bill (S. 548) this year and are looking for every possible opportunity to include it in any upcoming tax legislation. ACTION is doing everything we can to support their efforts. We also are working closely with Rep. Carlos Curbelo (R-FL-26), the new lead Republican on the House version of the Affordable Housing Credit Improvement Act (H.R. 1661), as well as Ranking Member Richard Neal’s (D-MA-1) office, to continue to build support in the House.

Our most immediate focus is the omnibus Fiscal Year (FY) 2018 spending legislation currently being negotiated, which must pass by March 23. The omnibus is likely to include a tax component, which could serve as a vehicle to advance the Affordable Housing Credit Improvement Act. Advocacy is critical over the coming weeks as negotiations are ongoing, not only to grow support for this legislation, but to ensure that congressional leadership is hearing from members that they want to see the bill enacted now. We encourage all ACTION members to:

1)   Reach out to current supporters of S. 548 and H.R. 1661 asking them to urge leadership to include the Affordable Housing Credit Improvement Act in the upcoming omnibus package, and

2)   Continue to build co-sponsorship, encouraging any members of Congress who have not already signed onto S. 548 or H.R. 1661 – especially Republicans – to do so.

Visit the ACTION Campaign Advocacy Toolkit for resources to help make the case for the Affordable Housing Credit Improvement Act.

Affordable Housing Credit Improvement Act Co-Sponsor Update

The Senate version of the Affordable Housing Credit Improvement Act (S. 548) has 23 co-sponsors – 12 Democrats, 10 Republicans and one Independent. There are also 18 Democrats who intend to co-sponsor the bill but are not yet formally listed, as Senator Cantwell seeks to maintain party balance.

Three new co-sponsors have joined the House version of the bill, H.R. 1661 – Rep. Darin LaHood (R-IL-18), Rep. Dennis Ross (R-FL-15), and Rep. Rick Larsen (D-WA-2). This brings the total co-sponsorship on the House bill to 127 representatives – 63 Democrats and 64 Republicans.

Trump Administration Releases Infrastructure Proposal

The Trump Administration released its FY 2019 budget proposal earlier this month, as well as a proposal for infrastructure legislation. The 55-page infrastructure plan does not include any proposals to invest in affordable housing, underscoring a need to continue to make the case that housing is a critical part of our nation’s infrastructure. The infrastructure proposal does call for lifting the volume cap on private activity bonds for certain activities, however it does not appear that housing is one of these expanded uses. 

Continued Advocacy Needed to Strengthen and Expand the Housing Credit in Anticipated Tax Legislation

ACTION is working to ensure that the Affordable Housing Credit Improvement Act (S. 548/H.R. 1661) is well positioned to be added to any potential tax legislative vehicle that Congress could consider this year.  It is possible that a tax package could move in concert with an omnibus spending package or separately with either disaster assistance legislation or attached to a bill renewing expiring tax provisions. Legislation may come together quickly, and it is incumbent on our continued advocacy to ensure that leadership is hearing from members of Congress that the Affordable Housing Credit Improvement Act should be included.

In light of the additional shortage of units that will result from the Tax Cuts and Jobs Act, it is more critical than ever to enact the Affordable Housing Credit Improvement Act, which would expand Housing Credit resources by 50 percent – making up for the expected loss in production while also making a meaningful dent in addressing the nation’s affordable housing crisis. We encourage all ACTION members to reach out to your members of Congress, especially Republicans, asking that they urge leadership to include the Affordable Housing Credit Improvement Act in any upcoming tax legislation. Use our Advocacy Toolkit to continue making the case for the Affordable Housing Credit Improvement Act.

Rep. Curbelo Takes Over as Lead House Sponsor on Affordable Housing Credit Improvement Act

Rep. Pat Tiberi (R-OH-12), former lead sponsor of the Affordable Housing Credit Improvement Act (H.R. 1661) and House Ways and Means Committee member, officially departed the House on January 15 to lead the Ohio Business Roundtable. Taking his place as lead sponsor on the Affordable Housing Credit Improvement Act (H.R. 1661) is Rep. Carlos Curbelo (R-FL-26), an original co-sponsor of H.R. 1661 and a member of the Ways and Means Committee. ACTION thanks Rep. Tiberi for being a long-time champion of the Housing Credit, and we look forward to working with Rep. Curbelo to advance the Affordable Housing Credit Improvement Act.

Two new co-sponsors have joined H.R. 1661 since tax reform was passed – Rep. Peter Roskam (R-IL-6) and Rep. Rodney Davis (R-IL-13) – bringing the total co-sponsorship on the House bill to 124 representatives – 62 Democrats and 62 Republicans. The Senate version of the bill, S. 548, has 23 co-sponsors – 12 Democrats, 10 Republicans and one Independent.

We are continuing to urge more co-sponsorship on the Affordable Housing Credit Improvement Act, especially among Republicans, and are encouraging all existing supporters to reach out to leadership asking that they prioritize advancing the bill this year.

New Committee Assignments Announced

New committee assignments were have been announced for 2018, which include two changes to the tax committees – Sen. Sheldon Whitehouse (D-RI) was appointed to the Senate Finance Committee, and Rep. Darin LaHood (R-IL-18) was appointed to the House Ways and Means Committee.

National Media Highlight Impact of Tax Reform on Housing Credit

A recent NPR article noted that the tax bill’s reduction in the top corporate tax rate will increase the national shortage of affordable housing because the Housing Credit will provide fewer benefits to investors. A New York Times article also noted the negative impacts on affordable housing production resulting from the tax bill, specifically citing Novogradac and Company’s analysis that the tax bill will reduce our expected supply of affordable housing by 235,000 units over the next decade. 

Advocacy Needed to Expand and Strengthen Housing Credit

Advocacy Needed to Expand and Strengthen Housing Credit in Likely Tax Component of Omnibus Spending Package

House and Senate leaders from both parties are currently trying to negotiate a budget agreement setting new top line discretionary spending limits, thus allowing appropriators to work on an omnibus spending bill. The omnibus spending is likely to be paired with other legislative priorities, including a tax package. ACTION is working with our lead sponsors to make the Affordable Housing Credit Improvement Act, including the 50 percent cap increase in the Cantwell-Hatch version of the legislation, part of the tax package that would move with the omnibus spending bill. We need ACTION grassroots advocates to make the case to members of Congress and to leadership for its inclusion in the tax package of the omnibus bill. This is all likely to happen fast, as the current continuing resolution (CR) funding the federal government runs out on January 19, so Congress must either finish the omnibus spending bill by then or pass what would be a fourth 2018 CR.  

All ACTION members should reach out to co-sponsors of H.R. 1661 and co-sponsors of S. 548 urging them to convey their support for affordable housing to House and Senate leadership by asking that they include the Affordable Housing Credit Improvement Act in any omnibus and tax package.

We encourage you to use the following talking points:

  • The affordable housing community applauds Congress for retaining the Low-Income Housing Tax Credit (Housing Credit) and tax-exempt multifamily Housing Bonds in tax reform. Together, these two programs finance virtually all affordable housing built and preserved in the United States.
  • However, our work is not done. There is a growing need for affordable housing that vastly exceeds the supply we are able to produce with limited resources currently available to us. There are currently more than 11 million households who pay more than half of their income on rent, and this number is expected to increase unless we act now. (See our state fact sheets for data on the affordable housing shortage in each state.)
  • For this reason, more than 2,000 businesses and organizations are calling on Congress to expand and strengthen the Housing Credit and Housing Bonds through the bipartisan and broadly-supported Affordable Housing Credit Improvement Act (H.R. 1661 and S. 548).
  • This legislation includes common-sense reforms to make the Housing Credit and Housing Bonds more streamlined and flexible. The Senate version of the legislation also includes a 50 percent increase in Housing Credit resources, which we are calling on both the House and Senate to adopt. This increase in resources would finance approximately 400,000 more affordable homes over the next decade than would otherwise be possible.
  • We appreciate your support of affordable housing and ask that you encourage leadership to include the Affordable Housing Credit Improvement Act in any omnibus and tax package.

See our Advocacy Toolkit for more resources on the Affordable Housing Credit Improvement Act.

Housing Credit Champions Readying to Leave Congress

Representative Pat Tiberi (R-OH), longtime Republican champion of the Housing Credit program in the House, is stepping down from Congress next week in order to become the president of the Ohio Business Roundtable. ACTION has been working with Tiberi’s office to identify a successor who will pick up the charge of advancing the Affordable Housing Credit Improvement Act, H.R. 1661, which Tiberi sponsored. 

Housing Credit Republican Senate champion, Finance Committee Chairman Orrin Hatch (R-UT), also announced his intent to retire from Congress at the end of his term next year. We will work to add the enactment of the Affordable Housing Credit Improvement Act to Senator Hatch's legacy. 

ICYMI: Tax Cuts and Jobs Act Retains Critical Housing Programs

Last month, the President signed the Tax Cuts and Jobs Act into law. The final version of the bill:

  • Retains the Housing Credit, with no modifications. Changes to the Housing Credit included in the Senate-passed version of the bill that would have changed the Housing Credit’s general public use requirement and basis boost rules were removed from the final bill.
  • Retains private activity bonds (PABs), including multifamily Housing Bonds, which provide critical financing to more than half of all Housing Credit developments and trigger the “4 percent” Housing Credit. The bill made no modifications to PABs that would have undercut Housing Bonds, such as modifications to PAB carryforward rules.
  • Lowers the top corporate tax rate from 35 to 21 percent, effective January 1, 2018, which we expect to reduce Housing Credit pricing.
  • Creates a base erosion and anti-abuse tax (BEAT), which would make Housing Credit investment less attractive to certain investors with foreign operations. However, the final bill attempts to mitigate the impact of the BEAT on Housing Credit investment by exempting 80 percent of the value of the Housing Credit from the BEAT. ACTION is working to analyze the extent to which the BEAT will still impact Housing Credit investors.

See the ACTION Campaign’s statement thanking Congress and the conferees for preserving the Housing Credit and multifamily Housing Bonds in tax reform.

Congress Passes Final Tax Reform Bill

Congress Passes Tax Cuts and Jobs Act; Retains Critical Housing Programs

The House and Senate both passed the final version of the Tax Cuts and Jobs Act, H.R. 1, this week and sent the bill to the President’s desk for a signature. The final version of the bill:

  • Retains the Low-Income Housing Tax Credit (Housing Credit), with no modifications. Changes to the Housing Credit included in the Senate-passed version of the bill that would have changed the Housing Credit’s general public use requirement and basis boost rules were removed from the final bill.
  • Retains private activity bonds (PABs), including multifamily Housing Bonds, which provide critical financing to more than half of all Housing Credit developments and trigger the “4 percent” Housing Credit. The bill made no modifications to PABs that would have undercut Housing Bonds, such as modifications to PAB carryforward rules.
  • Lowers the top corporate tax rate from 35 to 21 percent, effective January 1, 2018, which we expect to reduce Housing Credit pricing.
  • Creates a base erosion and anti-abuse tax (BEAT), which would make Housing Credit investment less attractive to certain investors with foreign operations. However, the final bill attempts to mitigate the impact of the BEAT on Housing Credit investment by exempting 80 percent of the value of the Housing Credit from the BEAT. ACTION is working to analyze the extent to which the BEAT will still impact Housing Credit investors.

See the ACTION Campaign’s statement thanking Congress and the conferees for preserving the Housing Credit and multifamily Housing Bonds in tax reform.

The inclusion of these critical affordable housing financing tools in the final tax reform bill is a testament not just to the programs’ strong track record, but also to the exceptional advocacy of stakeholders across the country. Thank you to all ACTION members who mobilized over the past several weeks to preserve multifamily Housing Bonds in the final tax reform bill and sustain affordable housing production.

Advocacy in 2018

The new tax system also presents concerns that we will work to address in the coming months. A recent analysis by Novogradac & Co. estimates that the final version of the tax reform bill would reduce affordable rental housing production by nearly 235,000 homes over the next decade due to the lower corporate tax rate and a change to the Credit’s inflation calculation. The vast majority of the impact comes from the loss of investor equity resulting from the reduced corporate rate. The BEAT could have a further negative impact on the Housing Credit equity market, which we are now working to analyze. 

GOP leadership has indicated they will consider a follow-up tax bill in 2018, and ACTION will continue advocating for modifications to keep the Housing Credit whole in technical corrections or other follow-on tax legislation. This includes advocating for modifications to the Housing Credit formula to sustain the Credit’s production potential even under the reduced corporate tax rate, as well as modifications to offset the potentially negative impacts of BEAT.

The tremendous support for the Housing Credit we witnessed during this recent tax reform debate will be critical as we continue urging Congress to address these concerns and sustain the Housing Credit’s production potential in a new tax system. This includes continued advocacy for modifications to strengthen and expand the Housing Credit, including the common-sense proposals in the Affordable Housing Credit Improvement Act, S. 548 and H.R. 1661.

We look forward to working with Congress to address these concerns, advance the Affordable Housing Credit Improvement Act and strengthen our affordable housing delivery system in 2018 and beyond.

New Version of Tax Cuts and Jobs Act Retains Housing Credit, Housing Bonds

Today the House and Senate GOP leadership filed a conference report on the Tax Cuts and Jobs Act, reconciling the differences between the House-passed and Senate-passed versions of the bill. Both chambers are expected to vote on the bill early next week.

The new version of the Tax Cuts and Jobs Act would:

  • Retain the Low-Income Housing Tax Credit (Housing Credit), with no modifications. The amendment that Sen. Pat Roberts (R-KS) added to the Senate bill was removed from the final bill. This amendment would have replaced the existing Housing Credit general public use requirement exception for artist housing with one for veterans; made properties in rural areas eligible to receive a basis boost; and reduced the maximum basis boost for all types of boost-eligible developments from 130 to 125 percent.
  • Fully retain private activity bonds (PABs), including multifamily Housing Bonds, which provide critical financing to more than half of all Housing Credit developments and trigger the “4 percent” Housing Credit. The bill made no modifications to PABs that would have undercut Housing Bonds.
  • Lower the top corporate tax rate from 35 to 21 percent, effective January 1, 2018.
  • Create a base erosion and anti-abuse tax (BEAT), which would affect investors’ ability to use the Housing Credit and other credits to offset certain taxes related to foreign earnings and earnings going to foreign parent companies. However, the conference report mitigates the impact of the BEAT on the Housing Credit by exempting 80 percent of the value of the Housing Credit from the BEAT. 

The ACTION Campaign thanks the conferees for retaining both the Housing Credit and multifamily Housing Bonds in the Tax Cuts and Jobs Act. Together, these programs provide the financing for nearly all affordable housing built and preserved in the U.S.

We also thank all ACTION members who successfully mobilized to urge Congress to reject the House proposal that would have eliminated all PABs, including multifamily Housing Bonds. This provision would have decimated affordable housing production by essentially eliminating the “4 percent” Housing Credit and causing us to lose out on building or preserving more than 800,000 affordable homes over the next decade. The fact that the Tax Cuts and Jobs Act retains both the Housing Credit and Housing Bonds is a testament to the success and critical nature of these programs, as well as our continued advocacy.

House and Senate Announce Agreement on Tax Cuts and Jobs Act

House and Senate Republican leadership have reportedly struck a general agreement on tax reform legislation, reconciling the House- and Senate-passed versions of the Tax Cuts and Jobs Act, H.R. 1. We expect them to file this final legislation, commonly known as the conference report, before the end of the week. While there have been press reports on various aspects of the agreement, including those about private activity bonds (PABs), we do not expect to know the official details or see bill language until tomorrow. The conference committee held an open meeting yesterday, which was largely ceremonial because the agreement itself was not released ahead of the meeting, and Democratic conferees expressed concern that they did not yet know the details of the deal. The Senate is expected to vote on the bill early next week, with the House following shortly thereafter.

Media and congressional sources have reported that both the Low-Income Housing Tax Credit and PABs will be retained in the new version of the Tax Cuts and Jobs Act. We do not yet know, however, whether there will be any restrictions on the use of PABs that may impact affordable housing. This week ACTION sent a letter to Congress urging them to fully retain the tax exemption on multifamily Housing Bonds, and to reject any modifications to the PAB program that in any way would restrict or reduce the use of Housing Bonds.

We are still awaiting clarity around several other issues affecting affordable housing:

  • Changes to the Housing Credit: The Senate-passed tax reform bill included several modifications to the Housing Credit, originating from an amendment authored by Senator Pat Roberts (R-KS):
    • Replacing the existing Housing Credit general public use requirement exception for artist housing with one for veterans. Though we expect this provision to remain in the bill, changes may be made to ensure existing artists' housing is not at risk for tax credit recapture.
    • Making properties in rural areas eligible to receive a basis boost. This provision is likely to remain in the final bill.
    • Reducing the maximum basis boost for all types of boost-eligible developments from 130 to 125 percent. Senator Roberts has requested this provision be removed from the final bill, however we do not yet know if it has been. 
  • The corporate tax rate: The latest reports indicate that the top corporate rate will be set at 21 percent, and would go into effect on January 1, 2018. We do not expect Congress to provide any adjustment to offset the negative impact the lower corporate tax rate would have on Housing Credit production in this bill. 
  • The base erosion and anti-abuse tax (BEAT): The Senate-passed tax bill’s BEAT provision would reduce, or potentially eliminate, the value of Housing Credit investment to certain investors.  We do not know whether the final agreement will make changes to prevent the loss of Housing Credit investment that might occur if the Senate language is adopted in the final bill. 

We will provide another update once the new version of the Tax Cuts and Jobs Act becomes available.

Senate Announces Conferees, Outreach Needed NOW to Save Housing Bonds

Yesterday the Senate approved its motion to go to conference with the House to negotiate tax reform legislation and Senate Majority Leader Mitch McConnell (R-KY) announced the Senate's Republican conferees.

Senate Finance Conferees:

  • Conference Chair: Finance Committee Chairman Orrin Hatch (R-UT) *Republican sponsor of Affordable Housing Credit Improvement Act (S. 548)
  • Senator John Cornyn (R-TX) 
  • Senator Rob Portman (R-OH) *co-sponsor of S. 548
  • Senator Tim Scott (R-SC) *co-sponsor of S. 548
  • Senator John Thune (R-SD)
  • Senator Pat Toomey (R-PA) 

Conferees on other committees:

  • Budget Committee Chairman Mike Enzi (R-WY)
  • Energy and Natural Resources Committee Chairman Lisa Murkowski (R-AK) *co-sponsor of S. 548

Conferees that are not Finance Committee members will deal primarily with issues under the jurisdiction of their own committees that do not impact the Housing Credit and Housing Bonds. 

The Senate will also appoint Democratic conferees, whose influence will be limited.

House Speaker Paul Ryan (R-WI) and Minority Leader Nancy Pelosi earlier this week separately announced the Republican and Democratic members of the conference committee in that chamber.  

House Ways and Means Conferees:

  • Conference Chair: Ways and Means Chairman Kevin Brady (R-TX-8)
  • Representative Devin Nunes (R-CA-22)
  • Representative Peter Roskam (R-IL-6)
  • Representative Diane Black (R-TN-6)
  • Representative Kristi Noem (R-SD-at large) *co-sponsor of Affordable Housing Credit Improvement Act (H.R. 1661)
  • Ways and Means Ranking Member Richard Neal (D-MA-1)
  • Representative Sander Levin (D-MI-9)
  • Representative Lloyd Doggett (D-TX-35)

House Conferees on other committees:

  • Natural Resources Committee Chariman Rob Bishop (R-UT-1)
  • Representative Don Young (R-AK-at large) *co-sponsor of H.R. 1661
  • Energy and Commerce Energy Subcommittee Chairman Fred Upton (R-MI-6), (replaced Rep. Greg Walden (R-OR-2) who Ryan had earlier appointed to the conference committee)
  • Representative John Shimkus (R-IL-15) *co-sponsor of H.R. 1661

As with the Senate conferees, the House conferees on committees other than Ways and Means are on the conference committee in order to focus on issues under the jurisdiction of their own committee, and not tax issues. 

The House and Senate conferees will now begin the formal work of reconciling differences between the House and Senate tax reform bills, though informal negotiations have been ongoing between leadership for several weeks. 

While all of the tax committee members on the conference committee will play important roles in determining the outcome of the tax provisions in the bill, we expect that final decisions will be made by leadership -- McConnell, Ryan, Hatch, and Brady -- and influencing those members remains our primary focus.

Retaining Housing Bonds is our top priority in conference. House Ways and Means Chairman Kevin Brady has suggested that a compromise on retaining private activity bonds could include limiting their uses to infrastructure, specifically airports and surface transportation.

In your outreach to all Republican members, emphasize that we must specifically retain multifamily Housing Bonds.

This week is absolutely critical for advocacy, and all ACTION members should be reaching out to Republican members to make the case for preserving multifamily Housing Bonds in conference. Please reach out to all Republican members, including those that are not conferees, asking them to weigh in with leadership and the conferees.  

In the early hours of the morning this past Saturday, the Senate passed its tax reform bill, which retains the Housing Credit and multifamily Housing Bonds. The House version of the Tax Cuts and Jobs Act would retain the Housing Credit, but repeal private activity bonds, including multifamily Housing Bonds. If Housing Bonds are repealed, roughly 800,000 affordable homes would not be built or preserved over the next decade, according to analysis from Novogradac & Company. See our overview of the provisions in the House and Senate tax reform bills impacting affordable housing. 

Visit our Advocacy Toolkit for updated sample letters to members of Congress, talking points on Housing Bonds and more.

House Appoints Conference Committee, Outreach Needed Immediately

Yesterday the House approved a motion to go to conference to reconcile differences between the House and Senate version of the Tax Cuts and Jobs Act. The House Republican conferees are:

  • Conference Chair: Ways and Means Chairman Kevin Brady (R-TX-8)
  • Rep. Devin Nunes (R-CA-22)
  • Rep. Peter Roskam (R-IL-6)
  • Rep. Diane Black (R-TN-6)
  • Rep. Kristi Noem (R-SD-at large) *co-sponsor of Affordable Housing Credit Improvement Act (H.R. 1661)
  • Rep. Rob Bishop (R-UT-1)
  • Rep. Don Young (R-AK-at large) *co-sponsor of H.R. 1661
  • Rep. Greg Walden (R-OR-2)
  • Rep. John Shimkus (R-IL-15) *co-sponsor of H.R. 1661

House Democratic conferees were also appointed, though their influence will be limited: Ways and Means Committee Ranking Member Richard Neal (D-MA-1) (the lead Democrat on the Affordable Housing Credit Improvement Act), Rep. Sander Levin (D-MI-9), Rep. Lloyd Doggett (D-TX-35), Rep. Raúl Grijalva (D-AZ-3) and Rep. Kathy Castor (D-FL-14).

The Senate has not yet announced its conferees or voted to go to conference, but ACTION members should begin outreach to House Republican conferees immediately to make the case for preserving Housing Bonds. Republican members who are not on the conference committee should still weigh in with leadership and the conferees.  

Over the weekend the Senate passed its tax reform bill, which retains the Housing Credit and multifamily Housing Bonds. The House version of the Tax Cuts and Jobs Act would retain the Housing Credit, but repeal private activity bonds, including multifamily Housing Bonds. If Housing Bonds are repealed, roughly 800,000 affordable homes would not be built or preserved over the next decade, according to analysis from Novogradac & Company.

See our overview of the provisions in the House and Senate tax reform bills impacting affordable housing and our priorities in conference. Our top priority as the House and Senate head to conference is the preservation of multifamily Housing Bonds, which face risk of elimination. 

Visit our Advocacy Toolkit for updated sample letters to members of Congress, talking points on Housing Bonds and more.

Senate Passes Tax Reform Bill, Urgent Action Needed to Protect Housing Bonds in Conference

Last night the Senate passed its version of the “Tax Cuts and Jobs Act” by a vote of 51 - 49. All Democrats voted against the bill, in addition to Senator Bob Corker (R-TN). The Senate version of the bill retains the Low Income Housing Tax Credit (Housing Credit) and private activity bonds, including multifamily Housing Bonds, which are essential for the production of roughly half of Housing Credit developments because they trigger the 4 percent Housing Credit. The Senate bill also makes several modifications directly and indirectly impacting the Housing Credit, outlined below.

The next step is for the two chambers to reconcile the differences between their bills. The House is expected to vote to proceed to a conference on Monday evening, and we expect negotiations to begin in earnest next week. It is also still possible that the House will forego a conference and instead vote on the Senate-passed version of the bill; however, at this point indications are that they will seek to conference their bills. 

The House version of the Tax Cuts and Jobs Act would retain the Housing Credit, but repeal private activity bonds, including multifamily Housing Bonds. If Housing Bonds are repealed, roughly 800,000 affordable homes would not be built over the next decade, according to analysis from Novogradac & Company. See state-by-state estimates of the impact  of eliminating Housing Bonds here.

Our top priority as the House and Senate head to conference is the preservation of multifamily Housing Bonds, which face risk of elimination. See our talking points on Housing Bonds and reach out to your Republican Senators and Representatives over the weekend insisting that Housing Bonds be retained in the final tax reform bill.

Earlier this week Rep. Randy Hultgren (R-IL-14) sent a letter to House and Senate leadershipsigned by twenty additional Republican representatives urging for the restoration of private activity bonds, focusing on the need for bonds to support investments in our nation’s infrastructure and affordable housing for low- to moderate-income families. We encourage anyone represented by one of these members to thank them and ask for their continued support in a final bill.

We ask ACTION members to focus your energy squarely on protecting tax-exempt multifamily Housing Bonds. Please keep up your calls to members of Congress, especially Republicans, to make sure they understand all that is at stake. Make sure they are talking to their leadership and letting them know how important it is that they retain Housing Bonds in the final package.   

Modifications to the Housing Credit

The new version of the bill includes an amendment filed by Senator Pat Roberts (R-KS), which would make several additional changes to the Housing Credit:

  • Replace the existing Housing Credit general public use requirement exception for artist housing with one for veterans. Removing the current law safe harbor would put all existing artists' housing at risk for tax credit recapture, and
  • Treat rural areas as difficult development areas for purposes of receiving a basis boost. This provision is offset by reducing the maximum basis boost for all types of boost-eligible developments from 130 to 125 percent. The reduced basis boost could make some properties financially infeasible, particularly properties that have begun the development process but have not yet been placed in service, and we have and will continue to express those concerns as final negotiations progress. 

The version of the bill approved by the Senate Finance Committee included several no-cost proposals to strengthen the Housing Credit, taken from the Cantwell-Hatch Affordable Housing Credit Improvement Act (S. 548), but these provisions were not included in the version of bill that was voted on last night.

Other Provisions Impacting the Housing Credit

The Senate bill would lower the top corporate tax rate to 20 percent, which would reduce the tax benefits associated with the Housing Credit, credit pricing and ultimately affordable housing production. We will continue to seek a compensatory adjustment to sustain affordable housing production in a lower corporate rate environment in future tax legislation.

In addition, there is a provision related to a “base erosion and anti-abuse” tax that would eliminate banks’ ability to use the Housing Credit to offset certain taxes related to foreign earnings and earnings going to foreign parent companies, which will impact some Housing Credit investors.

We will continue to advocate to sustain affordable housing production in light of these changes.

Updated on December 4See how the House and Senate versions of the Tax Cuts and Jobs Act would affect affordable housing development using the Housing Credit.

Bipartisan Policy Center Finds Link between the Housing Credit and Public Health

A new report from the Bipartisan Policy Center, Building the Case: Low-Income Housing Tax Credits and Health, uses the robust evidence base linking affordable housing to better health outcomes to conclude “the Low-Income Housing Tax Credit contributes positively to the nation’s public health.” As the primary source of financing for virtually all new affordable housing, there are many proven successes of the social, economic and education benefits of Housing Credit properties for families and communities. This report gathers research to support the less studied connection between the Housing Credit and health.

Highlights from the report:

  • The health of children is most positively impacted by affordable housing. Several studies found that children in unaffordable housing have higher rates of mental health problems, often lack basic access to primary pediatric care, suffer from behavioral or emotional problems due to frequent moving, experience poor nutrition and hospitalization and suffer from other health consequences due to unsafe housing conditions.
  • Incorporating supportive services in affordable housing – a growing trend in Housing Credit developments – improves health outcomes for residents and may have the potential to save health care costs for both patients and health care systems. One study found that combining affordable housing with intensive services for chronically ill homeless adults saved on average of $6,000 a year per person in health care costs.
  • When housing cost burdens are lowered, families are more easily able to afford healthy lifestyles and necessary health care services. High housing cost burdens were found to result in high prescription-drug non-adherence, poorer self-reported health issues and higher food insecurity.

The report also explores innovative efforts to leverage the Housing Credit to provide better individual and community health. Most notably, the incorporation of Health Impact Assessments (HIAs) into the development of state Qualified Allocation Plans (QAP) that govern how Housing Credits are awarded. HIA’s examine data, stakeholder comments and subject matter expertise to evaluate the potential public health consequences of policies and provide recommendations for minimizing negative health impacts and amplifying positive ones.

Though more research is required to demonstrate the specific ways Housing Credit-financed projects can impact heath, the growing evidence to support the linkage of affordable housing to improvements in health draws the logical conclusion that the Housing Credit is a critical policy tool for bettering the nation’s public health. As Congress moves quickly on tax reform, this provides yet another reason to sustain the pillars of our affordable housing delivery system – the Housing Credit and multifamily Housing Bonds.

ACTION Update: Senate to Vote on Tax Reform Bill this Week + More

Senate to Vote on Tax Reform Bill this Week; House-Passed Bill Eliminates Housing Bond Program

The Senate is beginning debate today on its tax reform bill. Leadership is now considering final modifications to the bill to shore up support among Republican members in advance of moving the bill to the floor for a vote, which could happen as early as tomorrow. The Senate needs only a simple 50-vote majority to the pass the bill.  

The version of the bill that was passed out of the Senate Finance Committee two weeks ago retains both the Low-Income Housing Tax Credit (Housing Credit) and private activity bonds, including multifamily Housing Bonds, and includes several no-cost provisions to strengthen the Housing Credit; however, a new version of the bill that reflects modifications agreed to since then may be introduced at any time before the vote.

Earlier this month the House approved its version of the “Tax Cuts and Jobs Act,” which retains the Housing Credit but would eliminate the tax-exemption on private activity bonds, including multifamily Housing Bonds. As written, this bill would reduce the future supply of affordable rental housing by nearly one million homes. Since then, Rep. Randy Hultgren (R-IL-14) has spearheaded a congressional Republican sign-on letter to House and Senate leadership opposing the proposed elimination of tax-exempt private activity bonds in the House’s tax reform bill, focusing on the need for bonds to support investments in our nation’s infrastructure and affordable housing for low- to moderate-income families. Twenty-one House Republicans, including Representative Hultgren, signed onto the letter. 

At this time, it is unclear whether the House and Senate will have a formal conference to reconcile differences between their bills, or if the Senate will make changes to its bill prior to its passage on the floor that would be palatable enough for House Republicans to pass that chamber unchanged.  

ACTION’s top priority is ensuring the preservation of the Housing Credit and multifamily Housing BondsAll ACTION members should continue to reach out to Republican Senators and Representatives to urge them to contact their leadership and tax committee chairs to insist that the final legislation preserve these critical programs. While we remain concerned about the impact of the lower corporate tax rate on affordable housing and will continue to seek opportunities to make changes to sustain affordable housing production in light of a reduced corporate tax rate, the threat of the elimination of Housing Bonds requires our full attention.

Outreach to the Senate:

  • We urge everyone to reach out to your Republican senators, both on and off the Finance Committee, and urge them to communicate to Finance Committee Chairman Orrin Hatch (R-UT) and Majority Leader Mitch McConnell (R-KY) their support for the Housing Credit and Housing Bonds, and tell them to make sure they retain these programs in the final legislation as negotiated with the House. 

Outreach to the House:

  • 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.

See our Advocacy Toolkit for:

Bipartisan Policy Center Report Suggests the Housing Credit Contributes to the Nation’s Public Health

A new report from the Bipartisan Policy Center, Building the Case: Low-Income Housing Tax Credits and Health, finds that “the robust evidence base linking affordable housing to better health outcomes… makes it reasonable to believe that the Low-Income Housing Tax Credit contributes positively to the nation’s public health.” The report also finds that properties financed by the Housing Credit have contributed to social, economic, and educational benefits for communities and families; reduced homelessness; helped low-income families free up valuable dollars to spend on healthy food and health care services; and contributed to positive health outcomes, particularly for populations with special health needs such as HIV, asthma, or substance use disorders.

National and Local Media Highlight Impact of Tax Reform on Affordable Housing

The impact of tax reform on affordable housing has been covered in numerous local and national media outlets. See our Housing Credit in the News page to see the round-up of stories and op-eds, and check back often for the latest.

If you have any questions please contact Emily Cadik, Director, Public Policy, Enterprise Community Partners, at ecadik@enterprisecommunity.org or 202-403-8015, or Jennifer Schwartz, Assistant Director for Tax Policy and Advocacy, National Council of State Housing Agencies, at jschwartz@ncsha.org or 202-624-7758.

Rep. Hultgren Circulates Letter in Support of Private Activity Bonds, Outreach Needed

Rep. Randy Hultgren (R-IL-14) is circulating a letter to House and Senate leadership opposing the proposed elimination of tax exempt private activity bonds in the House’s version of the Tax Cuts and Jobs Act (H.R. 1), focusing on the need for private activity bonds to support investments in our nation’s infrastructure. The letter also objects to the elimination of advanced refunding bonds in the House bill. “Private activity bonds finance exactly the sorts of public private partnerships of which we need more of, not less,” the letter states. “These bonds help finance housing for low- to moderate-income families that otherwise would not get built; toll roads and expressways, airports and seaports; hospitals and universities.”

Rep. Hultgren will be adding Republican signatories from both the House and the Senate until noon on Monday, Nov. 27. Please urge your Republican Senators and Representatives to sign on by contacting Bill Hulse at bill.hulse@mail.house.gov in Rep. Hultgren’s office.

Eliminating private activity bonds would have a devastating effect on affordable housing. Multifamily Housing Bonds, which are a type of private activity bond, provide critical financing to more than half of all Housing Credit developments annually by triggering the “4 percent” Housing Credit. Without multifamily Housing Bonds, this housing simply would not be built. See our talking points on Housing Bonds.

According to Novogradac & Co., the proposed elimination of private activity bonds would result in a loss of roughly 788,000 to 881,000 affordable rental homes over the next decade. See how many affordable homes would be lost in your state. While the Senate version of the tax reform bill would retain private activity bonds, their inclusion in any final tax bill is incumbent on continued advocacy.

In addition to advocating for the preservation of Housing Bonds, we also continue to urge Senators to adopt a proposal that would sustain Housing Credit investment in light of the lower corporate rate. See our recent blog post on the latest developments in tax reform and advocacy needed, and visit our Advocacy Toolkit for more materials to assist in your outreach.

If you have any questions, please contact Emily Cadik, Director, Public Policy, Enterprise Community Partners, at ecadik@enterprisecommunity.org or 202-403-8015, or Jennifer Schwartz, Assistant Director for Tax Policy and Advocacy, National Council of State Housing Agencies, at jschwartz@ncsha.org or 202-624-7758.

House Passes Tax Reform Bill, Senate Finance Committee Sends Tax Reform Bill to Floor

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:

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 ecadik@enterprisecommunity.org or 202-403-8015, or Jennifer Schwartz, Assistant Director for Tax Policy and Advocacy, National Council of State Housing Agencies, at jschwartz@ncsha.org or 202-624-7758.

New Senate Tax Reform Bill Adds Provisions to Strengthen Housing Credit, but Additional Changes Needed

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. 

ACTION needed:

  • 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 ecadik@enterprisecommunity.org or 202-403-8015, or Jennifer Schwartz, Assistant Director for Tax Policy and Advocacy, National Council of State Housing Agencies, at jschwartz@ncsha.org or 202-624-7758.

Senate GOP Tax Reform Bill Retains Housing Credit and Housing Bonds

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.

Action Needed

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:

If you have any questions, please contact Emily Cadik, Director, Public Policy, Enterprise Community Partners, at ecadik@enterprisecommunity.org or 202-403-8015, or Jennifer Schwartz, Assistant Director for Tax Policy and Advocacy, National Council of State Housing Agencies, at jschwartz@ncsha.org or 202-624-7758.

As House Wraps Up Tax Reform Mark-up, Senate Poised to Unveil Tax Reform Bill - Outreach Needed

The House Ways and Means Committee is completing consideration of the "Tax Cuts and Jobs Act, H.R. 1" while the Senate prepares to release its own tax reform bill this week. Now is an absolutely critical time for the ACTION Campaign to weigh in with members of Congress to save multifamily Housing Bonds and the Housing Credit production that those bonds make possible. While we continue to try to pursue changes to the House bill before it goes to the floor for a vote, we must influence the Senate bill today before its expected release tomorrow

Just as the House has moved quickly on tax reform in recent weeks, the Senate will also follow an aggressive timeline, with the goal of advancing tax reform legislation through both chambers before Thanksgiving. Weighing in now is critical -- see below for more details, specific action items and advocacy tools.

Senate Tax Reform Bill

The Senate Finance Committee is expected to release its own tax reform legislation after the House concludes its mark-up, which could come as soon as tomorrow. Significant differences between the House and Senate bills are expected, and we are working to ensure the Senate's bill will retain Private Activity Bonds, and in particular, multifamily Housing Bonds. Housing Bonds are responsible for roughly half of Housing Credit production because they trigger the 4 percent Credit. Without these bonds, the 4 percent Credit program would be effectively eliminated. Outreach today is absolutely vital.

Action needed: Educate Senators about the connection between multifamily Housing Bonds and the Housing Credit, and the devastating impact of the House's bill on affordable housing. Ask Senators to convey their support to Senate Finance Committee Chairman Orrin Hatch (R-UT) and Senate Majority Leader Mitch McConnell (R-KY) for 1) retaining the Housing Credit and Housing Bonds, and 2) making other adjustments to the Housing Credit to offset the impact of a lower corporate rate.

House Tax Reform Bill

The House Ways and Means Committee has been marking up the “Tax Cuts and Jobs Act” this week, and intends to finalize the legislation and send it to the House floor for an anticipated vote next week. This bill would have devastating impacts on affordable housing production nationwide -- the proposed elimination of Private Activity Bonds and the reduction in the corporate tax rate without modifications to sustain Housing Credit production would reduce the future supply of affordable rental housing by nearly one million units, according to Novogradac & Co.

There has been no indication that the Committee intends to make substantive changes that impact affordable housing during the mark-up, either to restore the tax exemption on multifamily Housing Bonds or to include modifications to sustain the Housing Credit's production potential under a reduced corporate tax rate. However, these types of changes to the bill may be made before it goes to the House floor for a vote. 

Action needed: Reach out to House Republicans, both on and off the Ways and Means Committee, asking that they reach out to Speaker Paul Ryan (R-WI) and Ways and Means Chairman Kevin Brady (R-TX) to urge them to 1) preserve Housing Bonds, and 2) make other adjustments to the Housing Credit to offset the impact of a lower corporate tax rate. Ask them to at least publicly voice their concern about the impact of eliminating Private Activity Bonds, either as part of the Committee mark-up for members on the Ways and Means Committee, or in the press. 

Advocacy Materials

New resources have been added to the Advocacy Toolkit on the ACTION Campaign website to assist in your outreach efforts. These include:

Visit the ACTION Campaign website for more information and advocacy materials.

If you have any questions, please contact Emily Cadik, Director, Public Policy, Enterprise Community Partners, at ecadik@enterprisecommunity.org or 202-403-8015, or Jennifer Schwartz, Assistant Director for Tax Policy and Advocacy, National Council of State Housing Agencies, at jschwartz@ncsha.org or 202-624-7758.

House GOP Tax Reform Bill Retains Housing Credit, But Repeals Housing Bonds

House Ways and Means Committee Chairman Kevin Brady (R-TX) has released the “Tax Cuts and Jobs Act” (see bill text and summary), which would:

  • Lower the top corporate tax rate from 35 percent to 20 percent, effective January 1, 2018.
  • Retain the Low-Income Housing Tax Credit (Housing Credit) with no proposed modifications.
  • Eliminate the tax exemption on private activity bonds, including multifamily Housing Bonds, which provide critical financing to roughly half of all Housing Credit developments. 

Despite maintaining the Housing Credit, the bill would devastate production under the program by eliminating private activity multifamily Housing Bonds. Over half of Housing Credit developments utilize tax-exempt bonds and 4 percent Housing Credits. Eliminating the tax exemption would eliminate these bond/4 percent transactions after 2017.

Coupled with the lower corporate tax rate, which would reduce investor interest in the Housing Credit without other changes to the Credit, the loss of Housing Bonds could reduce annual production by up to two-thirds annually.

Next Steps

Chairman Brady will develop a “chairman’s mark” over the weekend, which will include modifications to the legislative text released today – and provides an opportunity to weigh in to encourage the Committee to restore multifamily Housing Bonds and make other changes to offset the negative impact of other tax reforms. The House Ways and Means Committee will begin its mark-up of the legislation on Monday, November 6, which may last several days before it is sent to the House floor.

The Senate is expected to release its own legislation as soon as next week, with a mark-up the week of November 13. We do not expect the Senate bill to mirror the House bill and will be working to ensure that the Senate understands the devastating impact of the House’s bill on affordable housing. The goal is for each chamber to pass tax reform legislation on the floor by Thanksgiving, work out the differences in a conference committee in December, and have the President sign tax reform into law by the end of the year.

Action Needed

Now is a critical time to weigh in with members of Congress urging them to:

  • Preserve the tax exemption on multifamily Housing Bonds. Without Housing Bonds, Housing Credit development could be reduced by as much or more than 50 percent annually.
  • 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. More detailed proposals on the adjustments needed are forthcoming, but in the meantime we encourage advocates to simply convey the message that modifications will be needed.

ACTION has released a statement that we encourage you to send to your representatives.

Visit the Advocacy Toolkit for more resources to advocate for the Housing Credit and Housing Bonds.

If you have any questions, please contact Emily Cadik, Director, Public Policy, Enterprise Community Partners, at ecadik@enterprisecommunity.org or 202-403-8015, or Jennifer Schwartz, Assistant Director for Tax Policy and Advocacy, National Council of State Housing Agencies, at jschwartz@ncsha.org or 202-624-7758.

Congress Passes Budget Resolution Laying Groundwork for Tax Reform

The House narrowly passed the Senate’s fiscal year (FY) 2018 budget resolution today in a move that formally paves the way for Congress to pass tax reform legislation through the reconciliation process, allowing legislation to pass with only 50 votes in the Senate, as the Vice President could act as the tie breaker if the votes are evenly split. The budget resolution also allows the federal government to increase its debt by $1.5 trillion over the next ten years in order to lower tax rates.

Last month, Administration and Congressional Republican leadership released a “Unified Framework for Fixing Our Broken Tax Code,” which seeks to lower the top corporate tax rate to 20 percent and eliminate “numerous” corporate tax expenditures in order to help achieve the lower rate. The Housing Credit is one of only two corporate tax expenditures that the framework explicitly proposed to retain. The framework is silent on the tax-exemption for multifamily Housing Bonds, which provide critical financing to nearly half of all Housing Credit projects, although it is our understanding from various reports that the authors of the framework have a general agreement to fully retain the tax-exemption on municipal bonds, which include Housing Bonds.

House Ways and Means Committee Chairman Rep. Kevin Brady (R-TX) is expected to release the text of the Committee’s tax reform legislation on November 1, with the goal of holding a markup the week of November 6th and a full vote in the House the week of November 13th. The Senate is expected to follow closely behind the House, with a potential markup in the Senate Finance Committee the week of November 13th. The White House has also set an aggressive timeline by signaling its desire to have President Trump sign a tax reform bill into law before the year's end.

The tax reform process will move quickly over the come weeks, so now is a critical time for all Housing Credit stakeholders to reach out to Congress in support of the Housing Credit and Housing Bonds. Last week the ACTION Campaign sent a letter to Congress and the Administration signed by over 2,150 organizations and businesses, urging them to retain the Housing Credit and Housing Bonds, enact the Affordable Housing Credit Improvement Act, and make any other adjustments needed to ensure that the Housing Credit is not negatively impacted by a lower corporate rate or other changes in tax reform. Visit our Advocacy Toolkit for more resources to advocate for preserving, strengthening and expanding the Housing Credit and Housing Bonds in tax reform.