Today, the House Rules Committee released amended text for the Build Back Better Act, which includes Housing Credit provisions omitted from the initial pared-back framework released last week. Thanks to the persistent advocacy of ACTION’s members, supporters, and partners, several key Housing Credit production priorities were added in the newly updated bill text, amounting to the most significant expansion of the Housing Credit since its inception in 1986. The Housing Credit provisions in the new Build Back Better text are outlined below.
Housing Credit Production Provisions:
- A temporary Housing Credit allocation increase of 10 percent plus inflation for each of the three years from 2022 to 2024 over current baseline (which includes the 12.5 percent increase in effect for the past four years), with a reversion in 2025 to a lower baseline that doesn’t include the 12.5 percent (we are working on getting the 12.5 percent increase to be made permanent). The allocation increases amount to a roughly 41 percent increase over current levels by 2024. (Page 1257)
- The lowering of the bond financing threshold from 50 percent to 25 percent for five years, from 2022 to 2026. (Page 1259)
- A permanent 50 percent basis boost for properties serving extremely low-income tenants and an 8 percent minimum set-aside for extremely-low income properties (with a limitation that the state can use no more than 13 percent of its state Housing Credit Ceiling or 8 percent of its private activity bond cap on properties that receive the extremely-low income basis boost). (Page 1260)
- A permanent 30 percent basis boost for Native American areas. (Page 1306).
Other Housing Credit Provisions:
- A repeal of the Qualified Contracts option and changing the purchase price for existing properties. (Page 1264)
- Modifications to the Right of First Refusal. (Page 1266)
- The ability for the Section 48 Energy Investment Tax Credit to be taken without reducing the eligible basis for the Housing Credit. (Page 1351)
While not as extensive as the provisions passed by the House Ways and Means Committee in September, the inclusion of this significant expansion of the Housing Credit is a notable victory.
The House Rules Committee will report a rule governing the process for the floor debate on the Build Back Better Act. This is a step toward consideration of the legislation on the House floor. It also indicates that the plan for the House and Senate to pre-negotiate the bill is unlikely, which sets the stage for the Senate to respond to the proposal passed by the House (if and when that happens). Please see a “Dear Colleague” letter sent by Speaker Pelosi to her Democratic colleagues earlier today for additional details on the next steps in this process.
ACTION encourages our members, supporters, and partners to continue persistent advocacy for the Housing Credit, so that our priorities make it over the finish line. Check out ACTION’s recent Housing Credit messaging options to use in your outreach, and look up contact information for your Members of Congress below:
As we have shared before, the Build Back Better Act is our best opportunity for a legislative vehicle to swiftly implement a number of our Affordable Housing Credit Improvement Act provisions. We will continue to share legislative updates as the process unfolds, as well as specific calls to action to elevate the Housing Credit in the ongoing discussions. Although much work remains before a final deal is reached, this is a step forward in securing our Housing Credit production priorities. Thank you for your advocacy!