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

NEW DATE: ACTION Campaign Monthly Call on April 14

To accommodate April holidays, the ACTION Campaign will move the monthly call typically held the first Friday of the month from April 7 to Friday, April 14 at 2:00 PM ET. Please find the Zoom call information below, and download and import the iCalendar (.ics) files to your calendar system.

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Legislative State-of-Play

AHCIA Bill Leads Finalized

There will be two new Affordable Housing Credit Improvement Act (AHCIA) lead supporters this year, including Senator Marsha Blackburn (R-TN) and Representative Darin LaHood (R-IL), both of whom serve on their respective chambers’ tax-writing committees.

Senator Maria Cantwell (D-WA) will remain as the lead sponsor for the Senate bill, joined by Todd Young (R-IN), lead Republican, and Senator Ron Wyden (D-OR), who chairs the Finance Committee. Senator Blackburn is a new member of the Finance Committee, which is the Senate’s tax-writing committee, replacing Senator Rob Portman (R-OH) who retired at the end of the last Congress.

In the House, the bill will switch from Representative Suzan DelBene as the sponsor to Representative LaHood due to the shift in the chamber’s majority party. Representative DelBene will remain the lead Democrat, and Reps. Brad Wenstrup (R-OH) and Don Beyer (D-VA) will continue to serve as lead cosponsors as well. As ACTION members will recall, we lost our lead Republican champion Jackie Walorski (R-IN) last year in a tragic car accident.

ACTION is working with the House and Senate bill leads on introduction, which is expected later this spring. In the meantime, ACTION members should take proactive measures to raise the visibility of the Housing Credit and its importance to their states and communities by inviting Members of Congress to tour a property, come to a ribbon cutting, or scheduling meetings to share information about the need for more affordable housing. The relationships you make now will be critical 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.

ACTION recently updated all state and district fact sheets, which you can use for your advocacy efforts. More materials will be available when our champions on the Hill reintroduce the bill. We look forward to working with our champions – new and returning – to get the AHCIA passed.

Urgency of Passing AHCIA Raised in Senate Finance Committee Hearing

On March 7, the Senate Finance Committee held a hearing on the role of tax policy in increasing affordable housing supply for working families the current state of housing. ACTION Campaign members LISC, the National Multifamily Housing Council (NMHC), and the Washington State Housing Finance Commission testified at the hearing about causes and consequences of the affordable housing shortage impacting families across the country.

Witnesses and Senators alike, including Finance Committee Chair Wyden, stressed the urgency of increasing the housing supply via multiple methods, including by passing the AHCIA. Although some critical comments were made concerning the Housing Credit during the hearing, there was a general acknowledgment of the program’s success. One suggestion for improving the program raised to improve the program was increased data collection and data sharing requirements between HUD and the IRS. As mentioned in the February newsletter, ACTION’s Steering Committee recommended language to our congressional bill leads for a new section on data and transparency in the AHCIA.

The committee’s leaders, Chair Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID), expressed their desire to work together to identify and advance bipartisan solutions to address the need for more affordable housing.

Administration Updates

Biden Releases FY24 Budget Proposal

On March 9, President Biden released his Administration’s Fiscal Year 2024 (FY24) Budget Proposal. The ACTION Campaign was pleased that it included a $28 billion investment in the Housing Credit program over the next decade, which was outlined in the accompanying “Green Book” released by Treasury detailing the budget’s tax proposals (see pages 61-63 and 212).

Of particular note, the FY24 Budget Proposal is the first from the Administration that includes ACTION’s production priorities from the AHCIA, which were included in the White House’s Housing Supply Action Plan released in May of 2022. The budget proposal includes the lowering the 50 percent Private Activity Bond (PAB) threshold to 25 percent, which would go into effect for units placed in service after Dec. 31, 2023. The Administration also proposes permanently increasing the annual per-capita allocation each state will receive: in 2024, each state would get $4.25 per person (with a minimum of just over $4.9 million for the smallest states), and in 2025, each state would get $4.88 per person (with a minimum of over $5.6 million for the smallest states). In subsequent years, the per-capita rate and small-state minimum would be indexed to inflation, as under current law. This is a major increase from the current rate of $2.75 per person per state (with a small-state minimum of $3.185 million), indexed to inflation.

While the President’s budget is nonbinding, ACTION is pleased that the President included critical AHCIA priorities. We look forward to working with the Administration and Congress to get essential Housing Credit investments enacted.

Yellen Testifies Before House and Senate on Biden FY24 Budget Proposal, Underscores Investments in the Housing Credit

On March 10, Treasury Secretary Janet Yellen testified to the House Ways and Means Committee on behalf of the Administration regarding the President’s FY24 budget proposal. During the hearing, she conveyed the Administration’s support for affordable housing. AHCIA Champion Rep. DelBene commended the President for including the top financing provisions from the Housing Credit legislation in his proposal, and noted that, if passed, they would result in the construction or preservation of over two million affordable homes and three million new jobs over the next decade. DelBene also thanked her fellow House leads, Reps. Wenstrup, LaHood, and Beyer, touting the bill’s bipartisan support.

On March 16, Sec. Yellen testified again on the President’s FY24 budget proposal, this time to the Senate Finance Committee. During the hearing, Chair Wyden and Sen. Ben Cardin (D-MD) praised the inclusion of critical Housing Credit provisions in the President’s budget request and expressed their gratitude to Sec. Yellen for her continued support of the program. Chair Wyden secured a commitment from Sec. Yellen for her to help Congress negotiate a separate housing policy package that could get to the President’s desk soon in order to tackle the housing supply shortage and make rent affordable for all Americans.

ACTION Membership

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

  • Walison Corp., New York
  • Georgia Alliance to End Homelessness, Georgia
  • Pathway Communities, Arizona

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 to follow and join us.

Regulatory Recommendations from ACTION Members

ACTION has formed a subcommittee to explore opportunities to strengthen the Housing Credit through regulatory reforms and tackle existing regulatory barriers to financing affordable housing through the Housing Credit. Members may submit federal regulatory issues they would like ACTION to consider using this form.

Housing Credit Research and Publications

  • A March 1 piece in the Novogradac Journal of Tax Credits examines the potential derivative effects of market-rate multifamily housing starts from 2021-2022, which have been the highest two-year total since 1985-1986, might have on the Housing Credit program.
  • A March 21 article in Notes from Novogradac outlines the Housing Credit allocation amounts for 2023 recently released by the IRS: the 9% allocation is up 6.2% from 2022, the PAB allocation is up 9.2% from 2022, the national bond cap is up about $3.7B from 2022 to $43.8B – a record high.

Housing Credit News Highlights

  • A February 26 op-ed in The Hill by former Republican Senator Scott Brown (MA) and former Republican Representative Carlos Curbelo (FL) argued that affordable housing is not just a Democratic issue, and should be seized upon as a priority political issue by Republicans. The former Republican lawmakers cite a dizzying array of statistics to make their case, including for expanding and strengthening the Housing Credit.
  • A March 1 article in Vox indirectly mentions the Housing Credit and the AHCIA as tools that President Biden should work with Congress to pass in order to address the housing crisis. The article highlights the work Sen. Todd Young (R-IN), the top Senate Republican leading the AHCIA, has been doing, both with the Biden Administration and with his fellow Republicans in Congress, on housing issues.
  • A March 2 article in Bloomberg Tax highlights several important housing and community development bills that will be debated this Congress, including the AHCIA.
  • A March 2 article in Notes from Novogradac concludes that the AHCIA is the best way to address the nation’s homelessness crisis from a supply perspective, given its broad bipartisan, bicameral support, which several other notable housing and homelessness bills lack.
  • A March 7 article in Affordable Housing Finance covers the Senate Finance Committee hearing and notes that passing the AHCIA is the best way to alleviate the housing crisis in each state.
  • A March 8 article in Reuters covers the Senate Finance Committee hearing and notes that most witnesses and senators present urged Congress to pass the AHCIA.
  • The March 9 edition of POLITICO’s Morning Tax newsletter also covers the Senate Finance Committee hearing, noting that bipartisan legislation to protect, strengthen, and expand the Housing Credit is possible even in a divided Congress.
  • A March 9 article in Bloomberg Tax notes that ACTION co-chair Enterprise Community Partners urges Congress and the Administration to work together to strengthen, protect, and expand the Housing Credit and increase access to the program.
  • A March 10 article in POLITICO notes that Biden’s proposed investments in affordable housing, including via an expanded Housing Credit, is an indication that he’s running for reelection, and that the budget proposal itself is essentially a policy platform announcement.
  • A March 27 article in Affordable Housing Finance profiles the first project built in Arizona with that state’s new state Housing Credit.
  • A March 28 article in Affordable Housing Finance presents an interview with Rep. DelBene, who discusses her plans for the AHCIA this Congress.
  • On March 29, the Financial Accounting Standards Board (FASB) released updated accounting standards for tax credit investments, which includes the Housing Credit.
  • A March 31 article in Roll Call profiles Sen. Todd Young (R-IN), the Senate GOP lead on AHCIA, as he expands his profile as a bipartisan deal-maker on tax issues, especially regarding affordable housing policies.

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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