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President Biden’s Housing Supply Action Plan Includes Strong Investment in Housing Credit
On May 17, the White House announced a new Housing Supply Action Plan to increase the supply of affordable housing. The plan includes both legislative and administrative actions and builds off the Administration’s announcement last September on immediate steps to increase the affordable housing supply. The plan makes clear the fundamental and unparalleled role the Housing Credit plays in the development of affordable rental housing and stresses the Administration’s strong support for several of ACTION’s key legislative priorities. To learn about the specific details included in the plan, check out ACTION’s recent blogpost.
Reconciliation State of Play
Rumors surrounding legislative momentum for the reconciliation package – formerly known as Build Back Better (BBB) – continue to swirl, with recent reports indicating that Senator Manchin (D-WV) has been in close talks with Senate Majority Leader Chuck Schumer (D-NY), specifically related to climate and the deficit. As a reminder, in December of last year, Senator Manchin effectively halted BBB’s chances of passage, and his support is key in securing any final deal. Reports such as these show promise that there may be the possibility for a slimmed down version of the original package to move forward before the expiration of the current reconciliation instructions at the end of Fiscal Year 2022 on September 30; however, the outcome is still uncertain.
As of yet, the inclusion of the Housing Credit in any possible reconciliation package remains up in the air. ACTION continues our strong engagement with Congressional decision-makers to position our key provisions for their best chance of being included in any reconciliation or year-end deal. We continue to encourage ACTION members and partners to contact Democratic Senators in their states to elevate our Housing Credit priorities and to report back on any key takeaways.
ICYMI: Senate Introduces Legislation to Facilitate Use of Fiscal Recovery Funds with Housing Credit
On May 11, Senators Patrick Leahy (D-VT) and Susan Collins (R-ME) introduced the LIHTC Financing Enabling Long-term Investment in Neighborhood Excellence Act, or LIFELINE Act, to allow the use of Coronavirus State and Local Fiscal Recovery Funds (SLFRF) to make long-term loans to Housing Credit development. The legislation builds on the bipartisan legislation introduced in the House in March by Representatives Adams (D-NC) and Rouzer (R-NC), H.R. 7078.
To learn more about the specific provisions included in the Senate legislation, check out ACTION’s blogpost from earlier this month. We encourage ACTION members to help build support for these bills to unlock critical resources for Housing Credit projects.
Affordable Housing Credit Improvement Act Gains Additional Cosponsors
In May, two new Members of Congress signed on as cosponsors of the Affordable Housing Credit Improvement Act (AHCIA), H.R. 2573 and S.1136: in the House, Representative Steven Horsford of Nevada’s 4th District, and in the Senate, Senator Jon Ossoff of Georgia. These additions bring the total cosponsorship to 159 in the House (100 Democrats and 59 Republicans), including 74 percent of the Ways and Means Committee, and 35 in the Senate (25 Democrats and 10 Republicans), including 50 percent of the Senate Finance Committee.
Please join us in thanking these Members of Congress for their support for strengthening and expanding the Housing Credit. Check out ACTION’s updated cosponsorship list to see the Representatives and Senators signed on in your state and district.
ACTION is continuing our advocacy to build cosponsorship for the AHCIA. We encourage our members and partners to help us by reaching out to Members of Congress who have not yet signed on and sharing feedback from your outreach with Krista D’Alessandro (firstname.lastname@example.org).
Other Housing Credit Updates
Members of Congress Send Letter on AIT to Treasury and IRS
On May 26, Senators Michael Bennet (D-CO), Todd Young (R-IN), Rob Portman (R-OH), Ron Wyden (D-OR), and Mike Crapo (R-ID) and Representatives Suzan DelBene (D-WA-01), Jackie Walorski (R-IN-02), Donald Beyer (D-VA-08), and Richard Neal (D-MA-01) sent a letter to Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig urging them to expedite the release of a final rule for the Average Income Test (AIT). The bipartisan, bicameral group of lawmakers – who are members of the Senate Finance Committee and Ways and Means Committee – urged the secretary to issue a final rule that is both workable and responsive to consensus recommendations from industry stakeholders
The members of Congress signing the letter express their appreciation for the Administration’s commitment (outlined in the Housing Supply Action Plan referenced above) to finalize the AIT rule by the end of September. However, they push a step further, urging IRS to issue guidance ahead of that date.
ACTION was pleased to see legislators add their voices to press the IRS and Treasury to release a final rule that allows the AIT to best benefit individuals and families served by the Housing Credit, and we will continue to engage with regulators on this issue.
Banking Regulators Release Joint Notice of Proposed Rulemaking to Modernize CRA
On May 5, the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (Fed), and the Federal Deposit Insurance Corporation (FDIC) issued a joint notice of proposed rulemaking (NPR) to strengthen and modernize the Community Reinvestment Act (CRA) regulatory framework. CRA plays a key role in affordable housing, with CRA requiring banks to invest in low- and moderate-income (LMI) communities. In fact, approximately 73 percent of annual Housing Credit equity investment is CRA-driven.
The joint NPR was widely anticipated following the rescission of the OCC’s standalone CRA changes in August 2021. During the last Administration, federal regulators had taken separate approaches for the first time in the law’s history, beginning with the release of the OCC’s proposal to modernize the CRA in August of 2018 and followed by the Fed’s advance notice of proposed rulemaking in September 2020.
The new joint proposal seeks to: create an updated CRA evaluation framework with performance standards tailored to bank asset sizes; adapt the CRA to the expanded role of mobile and online banking by updating the approach for determining CRA assessment areas; adopt a metrics-based approach for evaluating retail lending and community development financing; and clarify CRA-eligible community development activities – including affordable housing – among other proposed changes to the CRA regulatory framework.
The public is invited to submit comments on the new joint proposal to update the CRA through August 5. ACTION intends to submit comments in support of strong regulatory standards to strengthen the Housing Credit program.
The ACTION Campaign is pleased to welcome the following new members, who joined the coalition this past month:
- Trout Brook Realty Advisors, LLC, Connecticut
- West Hartford Housing Authority, Connecticut
- Langston Hughes Affordable Housing, Inc., Georgia
- Texas Association of Affordable Housing Providers (TAAHP), Texas
Help ACTION continue to grow our membership and advocacy strength by encouraging your networks to support affordable housing and the Housing Credit by joining the coalition. Membership is free.
Together, we can demonstrate to Members of Congress the widespread support for the Housing Credit across the country. You can also help strengthen our reach by following the ACTION Campaign’s LinkedIn page and inviting your connections follow and join us.
Housing Credit Research
- Annual NLIHC report, “The Gap: A Shortage of Affordable Homes” finds that the supply of available and affordable rental homes falls short of demand, and that only 36 available and affordable rental homes exist for ever 100 extremely low-income renter households.
- A recent article in the Washington Post highlights the unsustainable increase in rent rates across the country, noting that rents rose 11.3 percent last year and that this statistic is expected to continue to increase due to supply shortages and construction delays. The article also emphasizes that low-income households, Black and Hispanic households, and younger households are disproportionality impacted by increasing rents.
- A May 4 blogpost from ACTION member Novogradac, “Rural LIHTC Developments have Two Options when Calculating Income Limits” details how 9 percent Housing Credit properties located in rural areas can calculate their income limits.
Housing Credit News Highlights
- A May 15 opinion piece in the Wall Street Journal by Suzan Clark, president and CEO of the U.S. Chamber of Commerce, and Brian Deese, director of the White House National Economic Council, highlights the shortage of affordable homes in the U.S. and outlines solutions to alleviate the shortfall, including tax incentives like the Housing Credit.
- A May 17 article in Multi-Housing News highlights the recommendations in the Biden Administration’s Housing Supply Action Plan, including those that strengthen and expand the Housing Credit.
- A May 18 article in Multi-Housing News includes insights from industry experts on how the proposals in the Biden Administration’s Housing Supply Action Plan impact affordable housing, including how the enhancements to the Housing Credit program would help more people in need access affordable homes.
- A May 24 opinion piece in The Hill, “Solving the housing crisis requires long-term federal investment,” stresses the rising need for affordable housing and calls out the Housing Credit as a key solution.
- A May 25 article in VermontBiz highlights the construction of 109 permanently affordable rental apartments in four communities across the state of Vermont, financed with a combination of Housing Credits and pandemic relief funds.
- A May 26 article in the Courier Times announces the opening of new affordable rental units for low-income seniors in Bucks County, Pennsylvania financed through the Housing Credit.
- A May 27 article in Rebusiness Online highlights a new 131-unit affordable housing community in Atlanta financed by the Housing Credit.
- A Shelterforce article, “What Can Be Done When LIHTC Affordability Restrictions Expire” highlights that by 2030, nearly half of all Housing Credit properties could lose their affordability restrictions, and calls for extending affordability periods and collecting data to learn about the affordability status of Housing Credit properties.
- A recent Shelterforce article, “Eviction Reduction Should Be an Explicit Goal of the Low Income Housing Tax Credit Program,” notes ways that – given its large role in financing affordable rental housing across the country – the Housing Credit can mitigate the harms of evictions on families and communities.