american flags and pins on white background

November 2022 Monthly Newsletter: Legislative Updates & Other Housing Credit News

Join the ACTION Campaign Monthly Call--New Zoom Details!

The ACTION Campaign monthly call will be held on Friday, November 4 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:

One tap mobile

  • +19292056099,,95825393141# US (New York)
  • +16699006833,,95825393141# US (San Jose)

Legislative Update

Members of Congress are home campaigning and won’t be back in Washington until after the midterm elections. Make sure you’re taking advantage of this time when Members are at home in their states and districts meeting with constituents to talk about our Housing Credit priorities, so that they will be ready to hit the ground running when they come back to D.C.

The legislative agenda upon their return is certain to be chock full of competing priorities. That last stretch of time after the election and before the new Congress takes office in January–commonly referred to as the Lame Duck session–is typically a time when Congress considers must-do legislation that they do not want to leave for the next Congress, and often includes tax legislation.

A couple of critical, must-pass pieces of legislation on the agenda include taking up a final Fiscal Year (FY) 2023 appropriations bill or omnibus and the National Defense Authorization Act of 2023. As a part of these conversations, lawmakers are also hoping to come to an agreement on a year-end tax package, which could hitch a ride along on one of these bills. ACTION is working with our Congressional and White House Champions to convey the urgency to enact our Housing Credit priorities as a part of these year-end legislative actions.

House Ways and Means Committee Chairman Richard Neal (D-MA) told reporters last week that including provisions to expand and extend the Housing Credit is a priority for him. Ranking Member Kevin Brady (R-TX) also confirmed that the committee plans to take up the Housing Credit as a part of the year-end tax package discussions, but also added that it is not a high priority for him. While this is not surprising, it means we will need to leverage the significant bipartisan support we have built on the committee for the Affordable Housing Credit Improvement Act (AHCIA), H.R. 2573 and S. 1136, working in close coordination with our House bill leads, Reps. DelBene (D-WA), Wenstrup (R-OH), and Beyer (D-VA).

In the Senate, there is also strong committee support to advance the Housing Credit in a tax package. We are strategizing with our lead Senate sponsors, Sens. Cantwell (D-WA), Young (R-IN), Portman (R-OH), and particularly Finance Committee Chairman Wyden (D-OR) on the best avenues in that chamber to secure a good outcome.

ACTION has been meeting with Democrats and Republicans on the House and Senate tax-writing committees to urge them to not only restore the 12.5 percent cut the program experienced this year, but to also seek the inclusion of provisions that are needed to address the critical and growing shortage of affordable rental housing.

Congressional tax writers are certain to try to find agreement on a tax package, but whether that package includes only expiring tax provisions or a broader set of tax proposals is not yet known. And both sides will need to negotiate to get to anything that can garner sufficient bipartisan support to pass through Congress. It is also clear from our conversations with legislators that any tax bill is likely to be limited in scope, which we have seen in past tax extender pushes. For this reason, ACTION is prioritizing the provisions that would have the most impact on increasing supply-reinstating the 12.5 percent cap increase and lowering the 50 percent test.

All of this momentum and visibility for the Housing Credit is a great starting block for the last legislative sprint before the culmination of the current Congress. As advocates, we need to continue building bipartisan cosponsorship and leverage our existing support in the coming weeks to ensure the Housing Credit makes it into any potential final tax package.

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.

ICYMI--White House Releases Progress Report on Housing Supply Action Plan, Including Action on Top Housing Credit Regulatory Priorities

On October 8, the White House released a progress report on their Housing Supply Action Plan that was published in May. The report highlighted three key actions by the administration related to the Housing Credit that ACTION has been advocating for, including the July announcement on the changes to the Treasury guidance for Coronavirus State and Local Fiscal Recovery Funds. The other two administrative actions were released in conjunction with the report, including the long-awaited final rule on the Average Income Test and a notice of an extension on Placed in Service (PIS) deadlines for certain Housing Credit projects delayed due the pandemic.

The AIT allows owners of Housing Credit properties to serve households earning up to 80 percent of area median income (AMI), as long as the average unit designation in each building is no more than 60 percent of AMI, meaning that to serve higher-income (but still low-income) households, owners also would need to target some units to households further down the income spectrum to achieve the average. This allows for greater income diversity and cross-subsidization so that more units can be built for extremely low-income households. It also makes development in rural areas more feasible by expanding the population who could live in Housing Credit developments. Read ACTION co-chair Jennifer Schwartz’s analysis of the AIT final rule and PIS deadline extension for more details.

The report also highlighted several other actions to increase affordable housing, including expanding Federal Housing Finance Agency Forward Commitment programs that would allow Fannie Mae and Freddie Mac up to $3 billion in forward commitments each year over the multi-family purchase cap to create more affordable units, as well as items around transit-oriented development, zoning incentives, and other regulatory efforts to expand the housing supply. In addition, the Administration called on Congress to enact legislation to expand affordable housing resources, including the Housing Credit. Building on that call, on October 19, Treasury Secretary Janet Yellen and Housing & Urban Development Secretary Marcia Fudge authored an op-ed in Yahoo! Finance, underscoring the need for more Housing Credit resources.

New Members of the ACTION Campaign--Help us grow!

In October, three members joined the ACTION Campaign. Please help us welcome the following new members:

  • Sage USA, New York
  • ACM Investment Group, Georgia
  • Arlington Housing Finance Corporation, Texas

Now is a critical time in our advocacy for the Housing Credit and more members is key. Help ACTION continue to grow our advocacy strength by encouraging your networks to join ACTION. Membership is free. You can also help spread the word by following the ACTION Campaign on LinkedIn and Twitter, inviting your connections to join via social media and get information on the latest Housing Credit advocacy. Together, we can demonstrate to Members of Congress the widespread support for the Housing Credit across the country.

Housing Credit Research and Publications

  • The National Low Income Housing Coalition (NLIHC) and Public and Affordable Housing Research Corporation (PAHRC) put out a joint report on the need for better Housing Credit data collection that found there is a need to improve the quality of property level Housing Credit data. HUD compiles property level data from housing finance agencies, but the database lacks key information.
  • The IRS extended COVID-19-related relief for Housing Credit properties. According to Notes from Novogradac, the notice extends the PIS deadline for 2019-2021 allocations until December 31, 2023 or later, postpones the reasonable restoration period by 24 months instead of 18 months, extends the correction period by up to 12 months, and the continues waivers for physical inspections.
  • A University of Connecticut study found that the impacts of Housing Credit construction affects racial groups differently and accredits these outcomes to selective migration. White individuals have better labor market outcomes because, when affected by Housing Credit construction, they move to “higher quality” neighborhoods. Black individuals have no change in labor market outcomes because they do not change neighborhoods. Hispanic individuals were found to have weaker outcomes as they move to lower quality neighborhoods.
  • The Urban Institute released a report titled Four Options to Support Vulnerable Renters as Emergency Measures End, which found that eviction filings have been increasing as relief programs close and as cost of rents and grocery bills rise. They detailed four options that could provide the universal rental assistance struggling renters need: continuing funding for Emergency Rental Assistance (ERA) programs, expanding the Housing Choice Vouchers program, implementing a federal renter tax credit, and establishing universal basic rent.

Housing Credit News

  • An October 7 article in Affordable Housing Finance highlights big news in the housing credit world this month: The IRS issued guidance on the AIT for the Housing Credit. The final and temporary regulations affect owners of low-income housing projects, tenants in those projects, and state or local housing credit agencies that monitor compliance with the low-income housing credit requirements.
  • An October 25 article in Roll Call discusses bipartisan support for Housing Credit expansion. With the end of the year quickly approaching, many housing advocates are eying year-end legislation opportunities to expand low-income housing construction incentives to offset a looming affordability crisis.
  • An October 26 op-ed in Puerto Rico’s The Weekly Journal makes great points on how the Affordable Housing Credit Improvement Act could benefit many communities.
  • An October 27 article in Globe St. reports that the Biden Administration released a progress report on their Housing Supply Action Plan. Among their improvements (including the average income test guidance), the administration also reported that the FHFA expanded government-sponsored enterprises (GSE) Fannie Mae’s and Freddie Mac’s Forward Commitment programs, providing more financing flexibility to housing developers.

mbrossy

Leave a Reply