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January Monthly Newsletter: Legislative Update & ACTION 2021 Year in Review

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Legislative Update & Current Advocacy Strategy

Build Back Better Act Stalls in the Senate

On December 19, Senator Joe Manchin (D-WV) announced that he will not support the Build Back Better Act (BBB) as currently constructed, casting doubt on prospects for the ultimate passage of this historic legislative package. In a Dear Colleague letter released the day after Sen. Manchin’s announcement, Senate Majority Leader Charles Schumer (D-NY) committed to still bring up the bill for a vote early in the New Year, despite current opposition from the West Virginia Senator. Senator Manchin’s announcement leaves all aspects of the legislation, including the provisions to expand and strengthen the Housing Credit, in limbo until the President and congressional Democrats can determine a path forward. 

As previously reported by ACTION, the Senate Finance Committee (SFC) had released updated legislative language on December 11, including historic investment in the Low-Income Housing Tax Credit (Housing Credit). The SFC Housing Credit provisions largely mirror those included in the House-passed legislation, except for a few changes regarding the timeline of the annual allocation increase and clarifications on the basis boost for extremely low-income households. The Senate parliamentarian has yet to review the Housing Credit provisions as a part of the so-called “Byrd Bath,” which determines whether any provisions violate the rules governing legislation considered through the budget reconciliation process.

As negotiations surrounding the BBB continue, ACTION will keep members and partners apprised of the latest legislative happenings, as well as key opportunities to engage in pointed Housing Credit advocacy to Members of Congress. In addition, we will look for additional opportunities to expand the Housing Credit, including the 12.5 percent expansion from 2018 that expired on December 31. ACTION is in close contact with the SFC and the House Ways and Means Committee on the issue and will alert members should there be a separate “extenders” legislation which could address this expiration outside of BBB.

ACTION will also push forward with its advocacy for the Affordable Housing Credit Improvement Act (AHCIA), building on the strong foundation of cosponsorship from 2021. As of December 15, we have secured 32 Senate cosponsors and 133 House cosponsors. (See “Year in Review” below for more details). We expect several opportunities for ACTION and its members to push for the expansion and strengthening of the Housing Credit in 2022.

2021 Year in Review

ACTION Congressional Outreach | Despite having to remain virtual in our advocacy efforts, ACTION’s engagement with congressional offices in 2021 remained strong. With the help of our members and partners, ACTION engaged every House and Senate congressional office regarding our Housing Credit priorities multiple times throughout the year via virtual meetings, phone calls, and email correspondence. In addition, we kept in regular contact with AHCIA cosponsors to advance Housing Credit priorities from the bill in both House and Senate versions of the BBB and held regular strategy meetings with AHCIA bill sponsors’ staff.

Letters to Congress | ACTION’s members and partners, our Congressional champions, and Mayors across the country called on Congressional leadership to include ACTION’s Housing Credit priorities in viable legislative vehicles.

  • In May, 82 mayors from 28 states across the country sent a letter to congressional leadership to demonstrate the broad local and community-level support for Housing Credit, calling on Congress to enact the AHCIA. The letter was led by Seattle Mayor Jenny A. Durkan and circulated in partnership with the ACTION Campaign.
  • In June, ACTION sent a letter to Congress signed by 2,422 national, state, and local organizations and businesses from across the country, urging the passage of AHCIA.
  • In July, the ACTION Campaign Steering Committee sent a letter to Congressional leadership urging the inclusion of the AHCIA in any infrastructure, economic recovery, or tax legislation moving toward enactment.
  • In August, 111 Democratic Members of the House signed a Dear Colleague letter to House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy, urging the inclusion of the AHCIA in reconciliation legislation.
  • In September, ACTION Campaign Co-Chairs and a number of ACTION Steering Committee Members sent a letter to congressional leadership, urging the enactment of critical Housing Credit production provisions in the final reconciliation package.
  • In October, ACTION sent a letter signed by hundreds of our members and other affordable housing stakeholders to President Biden, Senate Majority Leader Chuck Schumer, and House Speaker Nancy Pelosi urging the inclusion of ACTION’s Housing Credit priorities in any final reconciliation legislation. ACTION distributed the letter to all House and Senate Democratic tax staff, asking them to reinforce the message of support with congressional leadership and the White House.

AHCIA Cosponsorship Progress | In 2021, ACTION engaged in numerous meetings with congressional offices to build bipartisan support for the AHCIA. In the Senate, S. 1136 currently has 32 total cosponsors – including 10 Republicans and 22 Democrats – with 50 percent of the Senate Finance Committee currently signed on. In the House, H.R.2573 currently has 133 total cosponsors – including 79 Democrats and 54 Republicans – with 72 percent of the House Ways and Means Committee currently signed on. ACTION will continue its efforts to build cosponsorship for the AHCIA in 2022 and will engage our members and supporters to help with these efforts. For an updated list of AHCIA cosponsors, visit ACTION’s Advocacy Toolkit under the “Additional AHCIA Advocacy Support Materials” dropdown.

Other Housing Credit Legislative Highlights | In August, Senate Finance Committee Chair Ron Wyden (D-OR) released the Decent, Affordable, Safe Housing for All Act (DASH Act), comprehensive housing legislation that includes a number of Housing Credit provisions from the AHCIA. Specifically, it includes the three major unit financing provisions from the AHCIA – the cap increase for the 9 percent Housing Credit, the lowering of the bond financing threshold from 50 percent to 25 percent, and additional basis boosts for rural, Native American, and extremely low-income communities – which combined would finance as much as 2,015,000 additional affordable rental homes over 10 years. Read more about the DASH Act in a press release announcing the legislation.

Housing Credit Support from the Biden-Harris Administration | The transition to the Biden-Harris Administration in early 2021 began the confirmation process for a number of new federal agency heads. Several of these nominees have since been confirmed and have voiced their strong support for affordable housing and the Housing Credit:

  • During her January 19 confirmation hearing, Treasury Secretary Janet Yellen stated: “[The affordable housing crisis] is a huge problem…and we really need to devise effective ways to work on this and support affordable housing. Things like the Low-Income Housing Tax Credit I think have been very important.” [Timestamp: 2:49:40].
  • HUD Secretary Maria Fudge, formerly the Democratic Representative from Ohio’s 11th District, cosponsored the AHCIA in both the 115th and 116th Congress.

In addition, the Biden-Harris Administration demonstrated it’s support for the Housing Credit through its Fiscal Year (FY) 2022 budget request:

ACTION Regulatory Advocacy & Updates | As ACTION has continued to pursue legislative efforts to strengthen and expand the Housing Credit, we also continued to engage with agency officials on regulatory enhancements to the program. Below are examples of this outreach, as well as additional updates. 

  • Covid Relief Regulations. In January, the IRS issued Notice 2021-12 to provide additional Covid-19 relief measures for the Housing Credit program. ACTION and our partners have worked to extend and enhance these relief measures throughout the year, and in August, ACTION Co-Chair the National Council of State Housing Agencies (NCHSA) sent a letter to the IRS and Treasury urging them to extend certain temporary Housing Credit relief provisions in IRS Notice 2021-12. In November, ACTION Co-Chair Enterprise Community Partners and several other ACTION Steering Committee Members signed on to a letter urging the IRS and Treasury to follow the recommendations in NCSHA’s letter to the IRS and Treasury requesting additional Covid-19 relief measures for the Housing Credit program. For a complete list of the relief provided in Notice 2021-12, see NCSHA’s Housing Credit COVID-19 Relief Matrix
  • Average Income Test Updates. In March, the Internal Revenue Service (IRS) held a public hearing on the Housing Credit Average Income Test (AIT) proposed regulations, which were published in October of 2020. ACTION Co-Chair NCHSA and 14 other groups testified at the hearing. The IRS has yet to issue revised or final regulations on the AIT.  In December, 32 ACTION members sent a letter to the IRS detailing the industry’s consensus positions on how IRS should move forward to develop final AIT regulations ACTION and our partners continue to engage with the IRS to pursue final regulations that will address our concerns.
  • Community Reinvestment Act Updates. In February, ACTION Co-Chairs Enterprise and NCSHA submitted a comment letter on behalf of the ACTION Campaign to the Federal Reserve Board (Fed) on its advance notice of proposed rulemaking to modernize the CRA. The letter highlights the critical role the CRA plays in Housing Credit investment and encourages the Fed to issue a final CRA regulation that facilitates investment in affordable housing through the Housing Credit program. In July, the Fed, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) announced their joint commitment to strengthen and modernize the CRA. Following a review initiated by Acting Comptroller of the Currency Michael Hsu, the OCC also announced its plans to rescind its May 2020 final rule, which had been issued independently in an unprecedented break from the other agencies.
  • FHFA Announces Additional Housing Credit Investment for GSEs. In September, the Federal Housing Finance Agency (FHFA) announced the government-sponsored enterprises (GSEs), Freddie Mac and Fannie Mae, can each invest up to $850 million annually in the Housing Credit market, up from $500 million each. The increase in the investment cap would allow the GSEs to have about 7.5 percent of the market share according to Novogradac and Company.

New & Updated ACTION Resources | In 2021, ACTION undertook a rebranding effort and launched a new and improved website. The new website greatly expands ACTION’s presence and allows more flexible navigation to point members and partners to the most important advocacy actions and resources, including:

  • Updated state and district fact sheets for advocates to demonstrate the Housing Credit’s impact where they live;
  • An advocacy toolkit including educational resources to prepare for meetings and to share with elected officials, including Housing Credit Issue Fact Sheets detailing specific issue areas;
  • new video series including details on each of the provisions including the AHCIA;
  • social media advocacy guide, which includes samples for actions for individuals and organizations to help build support for the Housing Credit and advocate ACTION’s latest advocacy strategy; and
  • Our blog, where ACTION posts the latest news and advocacy actions for the Housing Credit.

We encourage all of our members and supporters to check out the new website and let us know if there are additional resources that may help in your Housing Credit advocacy!

ACTION Membership Growth | ACTION remains the largest coalition of Housing Credit advocates in the United States, with approximately 2,400 national, state, and local organizations and businesses signed on to the coalition as members. In 2021, our coalition continued to grow, with 57 new members this year. In December of 2021, we welcomed the following businesses and organizations:

  • Flexible PSH Solutions, California
  • Ascent Development Group, LLC, Indiana

Our grassroots membership is our strength, as it allows us to demonstrate to Members of Congress the widespread and growing support for the Housing Credit across the country. This year, we grew stronger than ever. Please help us continue to grow by inviting your affordable housing partners who are not yet members to join ACTION

In addition, we are working to make sure we have the latest contact information for our members. If you would like to add or change a contact for your organization, please enter that information in this form and we will make sure it is updated for 2022. You can also use the form to share your social media accounts if you would like ACTION to follow and share content from your organization on the Housing Credit.

Thank You!

The ACTION Campaign would like to thank affordable housing advocates across the country – especially our members, partners, and Congressional champions – who joined in our efforts to strengthen and expand the Housing Credit throughout 2021. In 2022, ACTION will continue its work to strengthen and expand the Housing Credit, and as much work remains to be done, we look forward to advocating alongside you in the new year.

Krista D'Alessandro is the tax policy analyst at Enterprise Community Partners. The ACTION Campaign is co-chaired by Enterprise and the National Council of State Housing Agencies.

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