Today, Congress is expected to pass a $1.4 trillion omnibus appropriations and $900 billion Covid-19 relief package. Included in the package is one of ACTION’s top Housing Credit priorities, a permanent minimum 4 percent Housing Credit rate. ACTION thanks Congressional leadership and our Housing Credit champions as well as ACTION’s nearly 2,400 members for their tireless advocacy of the minimum 4 percent Housing Credit rate.
A major provision from the Affordable Housing Credit Improvement Act (AHCIA) and one of ACTION’s key proposals for Covid-19 relief, the so-called “4 percent” rate actually fluctuates according to federal borrowing rates, which have reached historic lows during the pandemic. The credit reached a low of 3.07 percent and remained low at 3.09 percent this past December. A minimum 4 percent Housing Credit rate would strengthen the feasibility of critical affordable housing developments and provide parity to the 9 percent Housing Credit rate, for which Congress enacted a minimum rate in response to the 2008 Great Recession.
The minimum 4 percent Housing Credit rate would be effective for projects that receive Housing Credit allocations after December 31, 2020 and for bond-financed properties placed in service and receiving allocations from private activity bonds issued after December 31, 2020.
Securing a permanent, fixed 4 percent Housing Credit rate has been a long-time, top priority of the ACTION Campaign. The ACTION Campaign has been dedicated to advancing this priority through Congressional meetings, calls to action, sign-on letters, Mayoral engagement, and other grassroots efforts with our 2,400 national, state, and local partners, all the while supporting our dedicated Congressional champions. The passage of this priority is a coalition win to be celebrated by ACTION’s broad set of partners.
“We applaud Congress for including a permanent 4 percent rate for Housing Credit projects in this year-end package,” said Stockton Williams, Executive Director of the National Council of State Housing Agencies and ACTION Campaign Co-Chair. “Our nation faces an enormous shortfall of affordable rental housing, with need far outstripping supply. Never has this lack of supply been more evident than it is now with families suffering because of the coronavirus pandemic. The 4 percent minimum rate will allow us to build approximately 130,000 additional rental homes over the next decade. We are grateful to our leaders in Congress, in particular Senators Maria Cantwell, Todd Young, and Ron Wyden, and Representatives Suzan DelBene, Kenny Marchant, Don Beyer, and Jackie Walorski, who have fought so hard for this.”
“Securing a permanent, fixed 4 percent Housing Credit rate is a major accomplishment. This will make more affordable housing developments feasible in urban, rural, and suburban communities nationwide,” said Scott Hoekman, President and CEO of Enterprise Housing Credit Investments and ACTION Co-Chair. “The 4 percent rate will bring more predictability and security to the Housing Credit. It is a commonsense measure to strengthen our nation’s largest program for the production and preservation of affordable housing for which we applaud our Congressional champions.”
In addition to the minimum 4 percent Housing Credit rate, the final deal also includes an additional allocation of Housing Credits for states and territories that qualified for FEMA assistance as a result of major natural disasters occurring in 2020 through 60 days after enactment of the bill. As of this time, these include Alabama, California, Florida, Iowa, Louisiana, Michigan, Mississippi, Oregon, South Carolina, Tennessee, Utah, and Puerto Rico. These states and Puerto Rico will receive an increase equal to $3.50 multiplied by the number of residents in qualified disaster zones, which is capped at 65 percent of the state’s 2020 Housing Credit allocation, as well as a one-year extension of the placed in service deadline and 10 percent test deadline for developments in disaster-impacted counties. Unused disaster credits may be carried over to 2022.
To see the final bill text, click here.
Congress is expected to vote on the legislation this evening, after which the President would need to sign the package into law. Stay tuned for any updates and save the date for ACTION’s monthly call on Friday, January 8 at 2PM EST:
Phone number: 929-205-6099
Meeting ID: 193 634 880