Join the ACTION Campaign Monthly Call — *Note Date Change*
For July, the ACTION Campaign monthly call will be held next week on Friday, July 8 at 2:00 PM ET, rather than the first Friday of the month. The Zoom call information is below, and you can also download and import the iCalendar (.ics) files to your calendar system. An updated calendar invite will be sent later today to adjust for the July 8 call.
Join Zoom Meeting:
- Meeting ID: 976 9100 9830
- Password: 314424
One tap mobile:
- +19292056099,,97691009830# US (New York)
- +16699006833,,97691009830# US (San Jose)
Reconciliation State of Play
With the September 30 expiration of the current reconciliation instructions approaching, Senate Democrats are hoping to build a new reconciliation package before the end of the fiscal year that can gain the support of Senator Manchin.
Key Congressional staff have told ACTION that the Senate will not be starting with the Build Back Better (BBB) reconciliation legislation which was shelved in December and whittling it down; rather, negotiations are starting from scratch. Prescription drug pricing, energy, and climate provisions are at the top of the list for the package, according to news reports on the negotiations between Senator Manchin and Senate Majority Leader Schumer. Other priorities from BBB, including the Housing Credit, will have to jockey for a spot in this much smaller bill – that is if negotiators are able to strike a deal in time.
This means that advocacy for the Housing Credit over the next few weeks is critical, especially for those with Democratic Senators on the Finance Committee and in leadership. ACTION will continue engaging Congressional decision-makers to position Housing Credit production provisions for inclusion in the potential new reconciliation package. We encourage ACTION members and partners to report back on any key takeaways from advocacy outreach in the coming weeks. ACTION Steering Committee member AHTCC developed resources to illustrate how affordable housing bolsters infrastructure, the critical need to extend the 12.5 percent Housing Credit allocation increase, and reasons to lower the 50 percent bond-financing threshold, which may be useful in crafting outreach to Democratic Members of Congress on the significance of including the Housing Credit production provisions in reconciliation.
Other Housing Credit Updates
ACTION Submits Recommendations to the IRS on 2022-2023 Priority Guidance Plan
On June 3, ACTION Campaign co-chairs Scott Hoekman, President of Enterprise Housing Credit Investments, and Jennifer Schwartz, NCSHA’s Director of Tax and Housing Advocacy, sent a letter to the IRS detailing recommendations to the IRS 2022-2023 Priority Guidance Plan. The letter calls for the IRS to take several actions, including: issuing final average income test regulations; extending Covid-19 relief; implementing Violence Against Women Act protections for Housing Credit tenants; allowing greater flexibility for properties suffering a casualty loss; including relocation expenses in rehabilitation expenditures; and restricting certain planned foreclosures. Read the letter here.
Secretary Yellen Testifies Before Senate Finance & House Ways and Means Committees on President’s Budget Proposal, Housing Credit Highlighted
Treasury Secretary Janet Yellen testified before the Senate Finance Committee on June 7 and before the House Ways and Means Committee on June 8 to discuss the tax components of the President’s FY 2023 Budget. The Secretary’s testimony provided further detail to Congress on several tax priorities under the Secretary’s purview, including the Housing Credit.
At the Senate Finance Committee hearing, Senator Cardin (D-MD) highlighted the Housing Credit, in addition to other tax credit programs. Senator Cortez Masto (D-NV) called out the recent challenge of using the Housing Credit with State and Local Fiscal Recovery Funds (SLFRFs). Secretary Yellen expressed support for those policies raised by both Senators.
During the Ways and Means Committee hearing, Housing Credit champion and Affordable Housing Credit Improvement Act (AHCIA) lead cosponsor Representative Suzan DelBene (D-WA) noted the importance of the Affordable Housing Credit Improvement Act (AHCIA). She highlighted the provisions to increase the Housing Credit allocation and lower the 50 percent test to 25 percent in the bill. Secretary Yellen responded favorably, saying: “affordable housing is front and center on President Biden’s radar screen, and he’s looking at a whole host of proposals to make a difference there. The Low-Income Housing Tax Credit, of course, is crucial and it’s something that allows families to spend their dollars on other family expenses. So it’s critical.” Representative DelBene also highlighted a recent letter that she and other members of Congress sent to Secretary Yellen and IRS Commissioner Rettig on the Housing Credit average income test regulations. Secretary Yellen confirmed they would finalize that regulation soon. “You can count on that. We hope to get it done. We expect to get it done this summer and tried to address some of the problems that have been raised in connection with the rule.”
ICYMI: Members of Congress Urge Treasury, IRS to finalize Housing Credit Average Income Test
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 Housing Credit Average Income Test (AIT). The bipartisan, bicameral group of lawmakers – who are members of the Senate Finance Committee and House Ways and Means Committee, including Committee Chairmen Wyden and Neal – urged Secretary Yellen to issue a final rule that is both workable and responsive to consensus recommendations from industry stakeholders. The IRS has since responded to the lawmakers that a final rule regarding the AIT is forthcoming. ACTION will continue to advocate for a final rule that allows the AIT to best benefit individuals and families served by the Housing Credit.
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
- This month, Harvard’s Joint Center for Housing Studies released its annual, “The State of the Nation’s Housing 2022,” which underscores the need for substantial and consistent investment in affordable rental housing, especially given the fallout of Covid-19.
- A new report from ACTION member and partner, Novogradac, “Pillar Two and Tax Credit Equity Investments,” details the impact of the global minimum tax on tax credit equity investments in the United States and the need for additional guidance from the OECD to address questions that remain regarding Pillar Two.
- A new research article in Health Affairs titled, “Examining Health Care Access And Health Of Children Living In Homes Subsidized By The Low-Income Housing Tax Credit,” finds that children living in Housing Credit properties were more likely to access health care, and this access led to the discovery that they are more likely to have asthma and be chronically absent from school. Given these results, researchers suggest that policymakers consider Housing Credit policy features as a possible tool to improve children’s health in low-income areas.
- A recent article in Housing Policy Debate, “The Low-Income Housing Tax Credit Program: A Multicity Rent Savings Analysis,” examines rent savings in Housing Credit programs in 12 housing markets across the country. The study finds that although savings vary by market and decline as Housing Credit properties age, the developments offer rent savings compared to nearby market- rate rental housing.
- New analysis from ACTION co-chair Enterprise Community Partners, “California Can Build 14,000 Shovel-Ready Affordable Homes With $4 Billion Budget Surplus Investment” finds that without additional funding for federal programs like the Housing Credit and tax-exempt bonds, thousands of critically needed affordable homes will not move forward this year.
- A new report in National Equity Atlas, “The Shrinking Geography of Opportunity in Metro America,” highlights the declining availability of affordable housing in high-opportunity neighborhoods, especially for African American and Latino households. It finds that the number of zip codes affordable to low-income households dropped more than 50 percent between 2013 to 2019, and that there are no zip codes that are affordable to African American Households within high-opportunity neighborhoods.
- New research from the University Wisconsin-Milwaukee, “Analysis of Qualified Allocation Plans for Low-Income Housing Tax Credits and Their Relation to Poverty Deconcentration,” examined each QAP and coded the selection criteria based on density reduction, limiting developments to blighted areas, and access to high-opportunity areas. In Wisconsin, the QAP was found to promote deconcentration of poverty by instituting negative changes in criteria and reducing points for criteria often associated with poverty concentration.
- A study from the Proceedings of the National Academy of Sciences (PNAS), “Estimating eviction prevalence across the United States,” finds that every year, approximately 2.7 million households are threatened with eviction across the country. Examining data from 2000 to 2018, researchers found that peak eviction filings occurred during the Great Recession; however, eviction history is recorded without clarifying the reason, and researchers call for the development of a national, public, longitudinal large-scale database that helps identify the drivers and consequences of housing loss in order to inform policy solutions.
Housing Credit News Highlights
- A June 23 article in GlobeSt highlights Freddie Mac’s commitment to addressing the affordable housing crisis and its efforts to infuse liquidity across a spectrum of affordable housing products, including the Housing Credit.
- A June 21 article in The Denver Channel highlights how people living with disabilities are disproportionately impacted by the housing crisis and notes how Housing Credit financing helps make projects for these populations feasible.
- A June 21 article in Reuters highlights the Treasury Department’s new Office of Tribal and Native Affairs, which aims to address chronic tax and financing inequities faced by tribes, including ways to increase tribes’ access to the Housing Credit program.
- A June 20 opinion piece in Rebusiness Online by Marge Novak, SVP and Head of Capital markets at Berkadia, one of ACTION’s members, highlights the Housing Credit recommendations in the White House Housing Supply Action Plan and how these pose a critical opportunity to finance new affordable housing.
- A June 8 blogpost from Novogradac discusses how tax credits like the Housing Credit help to promote equity in affordable housing and community development.