Join the ACTION Campaign Monthly Call on Friday, February 7
The ACTION Campaign Monthly Call will be held on Friday, February 7 at 2:00 pm EST. Call-in information:
Phone number: 929-205-6099
Meeting ID: 193 634 880
House Ways & Means Committee Hearing on Infrastructure Stresses Importance of Housing Credit; House Democrats Release $760 Billion Infrastructure Framework
On January 29, the House Ways and Means Committee held the hearing, “Paving the Way for Funding and Financing Infrastructure Investments.” At the hearing, a number of Ways and Means Committee members voiced strong support for the Housing Credit, including Chairman Richard Neal (D-MA-01) and Representatives Suzan DelBene (D-WA-01), Dwight Evans (D-PA-03) and Stephanie Murphy (D-FL-07).
The ACTION Campaign released a statement ahead of the hearing urging committee members to ensure that any infrastructure bill includes a housing title, and that the housing title make central the Affordable Housing Credit Improvement Act (AHCIA). It highlights the important role that the Housing Credit plays in combating the critical affordable housing infrastructure deficit across the country, stressing that safe, affordable housing is a vital part of our nation’s infrastructure.
Chairman Neal stated: “We need to remember that when we invest in infrastructure, we need to do so fairly. Infrastructure is not only about financing public projects, but it is also about encouraging economic development and revitalizing struggling communities. We must continue to reinvest in both urban and rural neighborhoods through successful programs like the Low-Income Housing Tax Credit, the New Markets Tax Credit, and indeed the Historic Tax Credit. I have been a longtime supporter of these initiatives because they have real, positive impacts on our communities.”
Representative DelBene, lead cosponsor of the AHCIA, submitted ACTION’s statement in support of the Housing Credit to the record. She stated: “Safe and affordable housing is a critical part of our nation’s infrastructure, and like roads and bridges, affordable housing is really a long-term economic development asset.”
Representative Evans, a cosponsor of the AHCIA, also stressed the importance of affordable housing, stating: “None of us are home until all of us are home.” He then asked witnesses about setting a minimum 4 percent credit rate. Witness Laura L. Canter, Executive Vice President and Division Director of the Finance Programs Division at the Massachusetts Development Finance Agency, explained: “The 4 percent credit is basically tied to the federal cost of borrowing…with interest rates being so low, it’s not 4 percent anymore, its much lower, it’s closer to 3. So, if we knew that 4 percent was the floor, [projects] wouldn’t have to wait and see what their credit would be depending on what interest rates are when projects close.” Witness Dr. Phillip Fischer of eBooleant Consulting LLC and Former Head of Fixed Income and Municipal Bond Strategy, Global Banking, and Markets for Bank of America agreed that a 4 percent minimum would be beneficial, stating: “Increasing the certainty of the cash flows would reduce cost.”
Representative Murphy, another cosponsor of the AHCIA, also expressed the need for the Housing Credit, stating: “My constituents…face the most severe affordable housing shortage in the country, yet another outcome of underfunded infrastructure in the United States.” She asked witnesses about how the Housing Credit helps in addressing the affordable housing crisis. Ms. Canter stressed: “The credit is well understood by the market. It’s a mature program… The only trouble with the program is there simply isn’t enough of it… The program itself works.”
That same day, House Democrats released a five-year, $760 billion infrastructure framework, titled, “Moving Forward.” In addition to a heavy focus on transportation and clean energy, the plan identifies the expansion of existing tax credits as a key infrastructure need, including “housing investments incentivized by the low-income housing tax credit.” The more detailed infrastructure package is expected to be released in May.
The ACTION Campaign will continue to advocate for any infrastructure proposals to include key provisions from the AHCIA.
Bank Regulators Propose CRA Regulatory Rewrite, March 9 Deadline for Comments
On January 9, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) published a notice of proposed rulemaking (NPR) to modernize the Community Reinvestment Act (CRA). These are the first proposed changes to CRA regulations since 1995 and have strong implications for the Housing Credit, as an estimated 85 percent of Housing Credit investments are made by CRA-motivated financial institutions.
The proposal would make significant changes to the mechanism for measuring CRA-eligible activities, shifting from the current three tests financial institutes must meet – investment, lending, and services—to a single quantitative measurement standard. It would also expand the list of qualifying activities for CRA credit, among other components of the proposal. These changes could significantly shift incentives away from investment in affordable housing activities, including Housing Credits and Housing Bonds.
Public comments on the NPR are due on Monday, March 9. The ACTION Campaign will be developing comments in the coming weeks to advocate for a CRA framework that continues to incentivize meaningful community development investments in affordable housing.
Housing Credit Cited as Solution during House Financial Services Committee Hearing on Homelessness
On January 14, the House Committee on Financial Services held a hearing titled “On the Brink of Homelessness: America Is Leaving Families Vulnerable.” The hearing included witness testimony from an individual who had experienced homelessness industry experts offering solutions to the homelessness issue. Despite the AHCIA not falling under the House Financial Services Committee’s jurisdiction, Representatives Max Rose (R-NY-11) and Ted Budd (R-NC-13), both AHCIA cosponsors, voiced their support for the bill. Michael Hendrix, Director of State and Local Policy at the Manhattan Institute, when discussing the Housing Credit, added that it is an essential component of creating affordable housing across the country. Enterprise commends these Congressmen for raising these important issues and highlighting the bipartisan AHCIA. Click here to view the hearing.
Puerto Rico Earthquake Supplemental Appropriations Bill Introduced by House Includes NMTC, LIHTC, CDBG-DR
On January 28, the House introduced the Emergency Supplemental Appropriations for Disaster Relief and Puerto Rico Disaster Tax Relief Act, 2020 (H.R. 5687), which would provide $4.67 billion in assistance to Puerto Rico as they recover from a series of earthquakes. The bill, introduced by House Appropriations Committee Chairwoman Nita M. Lowey (D-NY-17), includes a provision that would increase the Housing Credit ceiling for Puerto Rico in calendar year 2020 by $50 million. The bill would also deliver $3.26 billion through the Community Development Block Grant-Disaster Recovery program and provide $500 million in New Markets Tax Credit allocations for both 2020 and 2021. To learn more details about the proposal, click here for Chairwoman Lowey’s press release.
In the News
A January 1 The Weekly Journal article, “Not in my Backyard,” dispels the myth that affordable housing developments lower real estate value in neighborhoods. A study of over 3,000 Housing Credit projects between 1996 and 2006 finds that the proximity of properties to affordable projects did not, in fact, have a negative impact on real estate values.
A January 2 article from The Washington Post, “The conundrum affordable housing poses for the nation,” lists the Low-Income Housing Tax Credit as a “tried-and-true” program dedicated to helping more Americans afford places to live.
A January 8 Hill opinion piece, “Troubling trends in housing for the new decade,” details the country’s growing affordable housing shortage and expresses the need for “bold public/private partnerships” like the Affordable Housing Credit Improvement Act to solve the growing crisis.