February 2023 Monthly Newsletter: Legislative Updates & Other Housing Credit News

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Legislative State-of-Play

The new 118th Congress is officially underway. In a historic vote, Rep. Kevin McCarthy (R-CA) was selected to be Speaker of the House by his colleagues on the 15th ballot – on January 7th, after making a string of concessions to his far-right flank, including committee assignments, changes to House operating rules, and lowering the threshold to initiate a “motion to vacate” – essentially a vote of no confidence against the Speaker – to just one representative.

House Republicans have finalized their committee assignments, including for the Ways and Means Committee, which has jurisdiction over the Housing Credit. Speaker McCarthy and new Democratic leader Hakeem Jeffries (NY) have reached an agreement on committee membership ratios between the parties. Leader Jeffries has released the Democratic lineup for Ways and Means, including subcommittees. Democrats will lose seats on committees compared to last year, reflecting the makeup in the House for the 118th Congress.

In the last Congress, with a 50-50 split in the Senate between Republicans and Democrats, committees had an equal number of members from each party. In this Congress, that will change, given the Democrats’ clear majority of 51 total Senate members. Majority Leader Chuck Schumer (NY) has released Democratic committee membership, but not yet subcommittee membership. However, because of retirements and resignations of Republican Senators who previously served on the Senate Finance Committee, Republicans will have three to four new members on the Committee, depending on the committee ratios. Republican leadership has yet to announce which members will take those seats.

Since the 118th Congress is divided, and with the majority party holding narrow majorities in both chambers, many prognosticators and pundits are predicting a gridlocked Congress for the next two years. Other observers believe that Congress could advance bipartisan legislation that has significant support from members of both parties. 

Over the next several months, we expect both Congress and the Administration to focus on how they might be able to resolve the debt limit standoff. On January 19, Treasury Secretary Janet Yellen announced that the US had reached its statutory borrowing limit of roughly $31.4 trillion and that the Treasury has begun taking “extraordinary measures” to keep paying the government’s bills. These actions will only prevent default for a limited period of time, so the clock is ticking for Congress to raise or suspend the debt limit in order to avoid potential catastrophic economic impact. Reaching an agreement between Congress and the Administration is likely to be even more fraught than in past debt limit negotiations.

What’s Next – Reintroducing the AHCIA

ACTION and the lead sponsors of the Affordable Housing Credit Improvement Act (AHCIA) are already turning our attention to reintroduction of the bill in the 118th Congress. As a first step, we will need to secure new Republican leadership to replace Senator Portman, who retired at the end of the last Congress, and Representative Walorski, who passed away last year.

ACTION campaign leadership also is working, with input from ACTION grassroots members, on a set of recommendations to the lead sponsors of the AHCIA for modifications to the bill to prepare it for reintroduction. As always, ACTION seeks to ensure that the bill will maintain wide bipartisan support in Congress and throughout the affordable housing industry and that any changes we suggest are politically feasible. 

Stay tuned for more information about reintroduction. 

Advocacy Materials

In preparation for reintroduction, ACTION is preparing new and updated advocacy materials. ACTION has updated all state and district fact sheets to reflect new data, all available on our website. As soon as our Congressional champions reintroduce the bill, ACTION will publish the bill summary and other relevant information to assist you with your cosponsorship advocacy.

Advocacy Actions for our Members

While we wait for the AHCIA to be introduced, ACTION urges its members to take proactive measures, including inviting Members of Congress to tour a property or come to a ribbon cutting. The relationships you make now will help you when it comes time to ask Members to cosponsor the bill, and the best way to achieve support for the program is to show them the difference the Housing Credit makes by bringing them to a property.

White House Announces Renter Protection Actions

This week, the White House announced new actions the Administration is taking to support renters, including issuing a “Blueprint for a Renters Bill of Rights,” launching the Resident-Centered Housing Challenge, and setting forth a number of policies various federal agencies will take to help renters get and sustain housing stability and prevent what the White House maintains are unfair practices in the rental market. These actions include the Federal Trade Commission and Consumer Financial Protection Bureau gathering information about various practices that may adversely impact tenants and applicants for rental housing; the Federal Housing Finance Agency examining proposed actions that would promote tenant protections and limit what the White House deems to be egregious rent increases; the Department of Justice informing potential guidance updates around anti-competitive information sharing, including in the rental market; and HUD’s intention to publish a notice of proposed rulemaking requiring public housing authorities and owners of properties receiving Section 8 project-based assistance to provide 30 days’ advance notice before terminating a lease due to nonpayment of rent.

The Resident-Centered Housing Challenge is a call to action for housing providers and other stakeholders to strengthen practices and make independent commitments to improve the quality of life for renters. Early commitments in the Challenge made by several ACTION members, including Stewards for Affordable Housing for the Future, the National Apartment Association, the National Association of Realtors, the National Multifamily Housing Council, and two state Housing Finance Agency members of the National Council of State Housing Agencies, are highlighted in the White House’s announcement. 

ACTION Membership

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

  • Johnson Environmental, South Dakota
  • Light House Homeless Resource Center, Maryland

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 and Publications

  • A January 3 research paper in Housing Policy Debate studies Housing Credit preservation challenges and strategies at Year 15 in New York City. This paper differs from previous papers studying preservation challenges in Year 15 because those papers have largely focused on weaker housing markets, whereas NYC is, of course, one of the strongest housing markets in the country. This paper also stands out as one of only a few that focus on successful preservation strategies and outcomes.
  • A January 13 analysis by the Urban Institute shows that, throughout the pandemic, renters in the bottom fifth of the rent price distribution have been making their rent payments on time at a decreasing rate, from 84.5 percent in January of 2020 to 82.3 in November of 2022, whereas the on-time rental payment rate for all renters has largely stayed the same. The piece recommends, among other things, more Housing Credit construction, and the delaying of Housing Credit deadlines, as pushed for in the Biden Administration’s Housing Supply Action Plan, to help the lowest-income renters be able to afford their rents on time and achieve housing security.
  • A January 20 analysis by the Urban Institute discusses how HUD can best allocate $85 million in Congressionally-appropriated grant money from FY 2023 to incentivize states, local governments, and metropolitan planning organizations (MPOs) to remove barriers to affordable housing. The piece recommends, among other things, that HUD could prioritize grant allocation to states that amend their QAPs to encourage Housing Credit development in “exclusionary communities.”

Housing Credit News Highlights

  • A January 3 article in the Novogradac Journal of Tax Credits highlights forecasts for the year ahead. It highlights major events on the horizon from Congress and the Administration, such as new guidance and regulations coming from Treasury and HUD, along with a legislative forecast for the divided 118th It notes that because of pandemic-era data quality problems, HUD will be using 2021 ACS data with an inflation adjustment, instead of ACS data from the previous three years, to determine income and rent limits for Housing Credit properties.
  • A January 4 article in the Novogradac Journal of Tax Credits goes into a deeper dive explaining HUD’s decision to use 2021 ACS data, as mentioned in the previous bullet.
  • A January 10 blog post by Novogradac goes even deeper than the previous two in its explanation of HUD’s data decisions for Housing Credit income and rent limits for 2023, and forecasts what practitioners should expect throughout the year.
  • A January 18 article in Mortgage Orb notes that Freddie Mac set a record of nearly $1 billion in Housing Credit equity investments in 2022. The article also notes that Freddie exceeded all its 2022 affordable housing goals set by the FHFA.

Max Brossy

Max Brossy is a 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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