Join the ACTION Campaign Monthly Call--New Zoom Details!
The ACTION Campaign monthly call will be held on Friday, October 7 at 2:00 PM ET. As a reminder, new Zoom call information was shared in September for calls moving forward, which is included below.
Join Zoom Meeting:
- Meeting ID: 958 2539 3141
- Password: 808007
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Congress cleared the way to head out for October recess with the passage of a continuing resolution (CR) for the start of Fiscal Year (FY) 2023, which began on October 1. The House approved the Senate-passed Continuing Appropriations and Ukraine Supplemental Appropriations Act of 2023, sending it to President Biden’s desk for his signature on Friday, September 30. The CR funds the government through December 16, averting a government shutdown before the November mid-term elections. In addition to continuing the FY22 funding levels, the law also includes $2 billion for HUD’s Community Development Block Grant Disaster Recovery program; a re-authorization of the National Flood Insurance program through the duration of the CR; and $12.4 billion in aid for Ukraine.
What’s Next–Pushing Forward AHCIA Priorities in the Lame Duck Session
This sets the stage for year-end negotiations on a final omnibus spending package, which is often the primary legislative vehicle for tax packages in Congress. The lame duck session, which occurs in the period after an election and before a new session of Congress begins, is the last opportunity this year for Congress to address the expiration of the 12.5 percent increase in authority which had been in place from 2018 until the end of 2021. In addition to pressing for the cap increase’s restoration, ACTION is working to increase bipartisan support for other priories from the Affordable Housing Credit Improvement Act (H.R. 2573 / S. 1136), including the lowering of the 50 percent bond financing test. In addition to limiting housing production in states facing bond cap constraints, the current bond financing test requirement is a danger to projects that see cost increases, as such projects could be at risk of failing the 50 percent test.
The congressional tax committees’ leaders are now gauging their members’ priorities, with the Senate Finance Committee Republicans seeking input from their members and the Ways and Means more broadly seeking input. So now is a good time to make sure your members of Congress in these key positions are hearing from you. Urge them to make expanding the Housing Credit for increased production their top priority as they communicate with Committee leadership.
While we do not yet know for sure whether Congress will enact tax legislation during the lame duck, there is a good chance they will at least consider tax extenders, if not a broader package. We hope to know more after the November election. Any tax bill is likely to be limited in scope, thus ACTION is focusing on the provisions that would have the most impact on increasing supply–reinstating the 12.5 percent cap increase and lowering the 50 percent test.
Advocacy Actions for our Members
There are several ways to advocate for our Housing Credit provisions for inclusion in a year-end tax package:
- Weigh in with existing AHCIA supporters on the Ways and Means and Senate Finance Committees to ask them to include the Housing Credit as a priority in any tax package that moves forward in the remainder of this Congress, sharing local examples, state or district fact sheets, and other data points to convey the need and sense of urgency to take action. Ask them to communicate their prioritization of the Housing Credit to leadership of their respective tax committee.
- Follow up with any of your Senators and Representatives who are cosponsors, but not on either of those committees, asking them to contact their respective congressional leadership to convey support for the Housing Credit and push for legislative action before the end of this Congress.
- Help build up AHCIA cosponsorship, in particular with Republicans. We have strong bipartisan support on both bills and increasing those numbers is critical for our legislative push if there is a bipartisan year-end tax bill.
Affordable Housing Credit Improvement Act Gains Additional Bipartisan Support in the House
In September, 23 new members of the House of Representatives signed on as cosponsors to the AHCIA, H.R. 2573. The AHCIA now totals 194 total cosponsors including leads (130 Democrats, 64 Republicans), including 77 percent of Ways and Means Committee Members. In the Senate, S. 1136 has a total of 35 total cosponsors including leads (10 Republicans, 25 Democrats), including 50 percent of Finance Committee Members.
Check out ACTION’s updated cosponsorship list to see the Members of Congress currently signed on.
Average Income Test Rule Forthcoming
As of this writing, the final rule for the Housing Credit Average Income Test (AIT) minimum set-aside has not yet been released. However, we have reason to believe Treasury and IRS will issue it as soon as this week. Be on the lookout. If it is out by this Friday’s ACTION call, we will be sure to talk about it.
Housing Credit Research and Publications
- Affordable Housing Finance recently examined how climbing interest rates and inflation rates are impacting Housing Credit deals. Notably, rising rates can make borrowing debt more expensive and reduce loan proceeds, but also cause a strain on development budgets, and the potential for equity pricing to be affected.
- Rutgers University released their Annual Report on the Economic Impact of the Historic Housing Tax Credit for the Fiscal Year 2021. They found that properties financed by equity from the federal Historic Tax Credit generated 135,000 jobs and $8 billion in total rehabilitation investment in FY 2021. They also found that of the 1,063 historic rehabilitation projects completed in FY 2021, 44% were low- and moderate-income tracts and 78% were in economically distressed areas.
- NCSHA released an independent report titled “Filling Funding Gaps — How State Agencies Are Moving to Meet a Growing Threat to Affordable Housing.” This report analyzed the challenges state HFAs and their partners due to rising costs of labor, materials, and financing and how this is putting Housing Credit development at risk.
- The Housing Policy Debate published a research paper titled, “Shaping a Healthier LIHTC Housing Stock: Examining the Role of States’ Qualified Allocation Plans.” The paper discusses health regulations in the qualified allocation plan and how typical healthy housing policies focus on the quality of housing. The paper also outlines a few motivators to include healthy housing provisions, including enhancing the Housing Credit program to incentivize location-based amenities, and bundling different provisions.
- A University of Washington study looked at how federal subsidies, specifically the Housing Credit program and the Housing Choice Voucher program, overlap to address affordable rental housing issues.
- Novogradac discusses in a blog post things to consider regarding the changing forecasting process for Housing Credit revenue impacts. These considerations include inflation, income limit caps, and operating expenses.
Housing Credit News Highlights
- Multi-Housing News put out a piece on how financing affordable senior housing has become increasingly challenging due to higher construction costs, lower tax credit prices, and high interest rates.
- An op-ed piece from Newsweek about how the Housing Credit has been critical in communities like Milwaukee in leveraging public and private funds to create 197 affordable, multi-family housing units and more than 60,000 square feet of commercial and community space in the heart of Milwaukee’s largest neighborhood.
- Another op-ed piece from Affordable Housing Finance makes a case for lowering the bond financing test from 50% to 25% in order to increase the supply of affordable housing.
- Affordable Housing Finance reported nine Housing Credit developments won this year’s Charles L. Edson Tax Credit Excellence awards. The awardees were recognized for outstanding affordable housing properties that have demonstrated impactful use of the Housing Credit during the Affordable Housing Tax Credit Coalition’s Fall Conference.