August Monthly Newsletter: Legislative Updates & Other Housing Credit News

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Legislative Updates

Reconciliation State of Play

Last week, in a surprising turn of events, Senate Majority Leader Schumer (D-NY) and Senator Manchin (D-WV) announced they had finally struck a deal on the long-anticipated reconciliation bill. The new text, called the Inflation Reduction Act of 2022, was kept under wraps and was only released after the Senate passed its CHIPS, or China competes bill, due to comments that Senate Republicans would not move forward on that legislation if the reconciliation work was continuing. Both President Biden and Speaker Pelosi have expressed support for the package.

The proposed reconciliation legislation is broader than originally anticipated, and includes provisions on climate, energy, healthcare, and tax. While the new package does not focus on housing, there are some climate-related housing items, specifically changes to make sure that energy credits do not impact Section 42 basis, as well as $1 billion for HUD to improve energy and water efficiency of affordable housing. The proposed legislation also has a number of tax implications to raise revenues, including the implementation of a 15 percent minimum corporate tax rate and the allowance of general business credits, such as the Housing Credit, to be taken against the minimum rate.

Although ACTION’s key Housing Credit provisions are not included in the package, we are in close communication with our Congressional champions on avenues to secure its inclusion in any final deal. We will continue to keep our members and partners appraised of necessary advocacy actions as well as movement on the bill, as the Senate is expected take up the legislation this week.

Other Housing Credit Updates

Treasury Issues New Guidance to Facilitate Use of SLFRF with Housing Credit

On July 27, the Treasury Department announced new guidance to increase state, local, and tribal governments’ ability to use Coronavirus State and Local Fiscal Recovery Funds (SLFRF) authorized in the American Rescue Plan Act (ARPA) to support affordable housing development, including through the Housing Credit.

ACTION and our partners, under the leadership of ACTION Co-Chair NCSHA, have been working closely with Treasury and Members of Congress to optimize the use of SLFRF to support affordable housing construction over the past several months, including through the LIFELINE Act. Learn more in ACTION’s new blogpost.

Housing Credit Receives Resounding Support in Senate & House Congressional Hearings

This past month, the Senate Finance Committee and the House Ways and Means Committees held hearings on the role of tax incentives in affordable housing and the American housing crisis, respectively. Both hearings highlighted the critical role of the Housing Credit in addressing our nation’s affordable housing shortage. Learn more about the hearings in a recent ACTION blogpost, and help us thank Members of Congress and witnesses who voiced their support for the Housing Credit.

REMINDER: CRA Comments Due August 5

Comments on the joint notice of proposed rulemaking to strengthen and modernize the Community Reinvestment Act (CRA) regulatory framework are due this Friday, August 5. 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. ACTION has been working closely with our members and partners to prepare a comment letter in support of strong regulatory standards to strengthen the Housing Credit program. We will share this letter with our members once finalized.

ACTION Membership

In July, the ACTION Campaign welcomed four new members to the coalition. Please help us to welcome the following new members:

  • Domera Development, LLC, Arizona
  • Community Development Partners, California
  • Rook Capital, Inc., Missouri
  • Commonwealth Development, 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

  • New research from Freddie Mac examining at risk properties show that Housing Credit properties remain affordable even after exiting the program, and that while there are generally rent increases, these are modest and remain affordable to tenants earning below the Area Median Income.
  • A recently published research article examines the role that Qualified Allocation Plan (QAP) provisions play in affecting the mental and physical well-being of households in Housing Credit homes.
  • In a new special report, ACTION member Novogradac provides a picture of what happened for occupancy, rent, and operating expenses for Housing Credit properties during the pandemic, as well as how demographics changed and how future income limits will be affected by Covid-19 repercussions.
  • The Federal Housing Finance Agency’s inaugural report on affordable housing activities of regulated entities details the full range of mission activities carried out by the agency’s federal regulated entities, including those related to the Housing Credit.

Housing Credit News Highlights

  • A July 28 article in The Real Deal highlights the Housing Credit as a key solution to the affordable housing crisis and credits the program as an effective tool for development and preservation of millions of affordable homes.
  • A July 28 article in the Miami Herald highlights Stacey Abrams’ plan to increase the supply of available and affordable housing across Georgia should she become the state’s next Governor. Her plan would require that Housing Credit developments serve very low-income individuals and families.
  • A July 28 opinion piece in the ct mirror stresses that low-income housing, including that build through the Housing Credit, boosts Connecticut’s local real estate values.
  • A July 28 blogpost from ACTION member Novogradac details the proposed Schumer-Manchin reconciliation deal, highlighting the investment tax credit (ITC) provision that would allow ITC to not reduce Housing Credit basis.

Krista D'Alessandro is the senior 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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