Legislative and Cosponsorship Update
The enactment of the debt ceiling deal on June 2nd suspended the United States’ debt limit through January 2025, eliminating pressure on Congress to raise the debt limit until after the next presidential election. Not only will Congress need to grapple with the debt ceiling that year, it must also address various temporary tax provisions put in place by the 2017 Tax Cuts in Jobs Act that expire at the end of 2025. While this could provide an opportunity to move ACTION’s Housing Credit priorities, we are working to advance as much of the AHCIA as possible this year, and we believe there are good opportunities to do so.
The House Ways and Means Committee held a markup for a set of business-related tax bills collectively called the American Families and Jobs Act on June 13. This partisan package passed by the Republicans on the Committee on a party-line vote would also repeal a number of green energy incentives from the Inflation Reduction Act. While the bill, as marked up by the Committee, does not include provisions impacting the Housing Credit, it is considered to be the opening salvo for future negotiations for potential tax legislation later this year, which could provide an opportunity to advance pieces of the Affordable Housing Credit Improvement Act. Senate and House tax-writing committees have indicated they hope to reach a bipartisan agreement on a tax package.
In anticipation, the ACTION Campaign and our partners have been working to quickly rebuild cosponsorship for the Affordable Housing Credit Improvement Act (AHCIA) of 2023, S. 1557 and H.R. 3238, since its introduction on May 11. In less than two months, over one quarter of Congress signed onto the bills.
In the House, there were 14 new cosponsors in June, bringing the total number of cosponsors to 116, including the bill’s leads.
- Brad Sherman (D-CA-32), June 13
- Rick Crawford (R-AR-01), June 13
- David Trone (D-MD-06), June 13
- Zach Nunn (R-IA-03), June 13
- Mark Takano (D-CA-39), June 13
- Tim Burchett (R-TN-02), June 13
- Greg Casar (D-TX-35), June 22
- Andy Barr (R-KY-06), June 22
- Dan Goldman (D-NY-10), June 22
- Ken Calvert (R-CA-41), June 22
- Doris Matsui (D-CA-07), June 22
- Greg Pence (R-IN-06), June 22
- Katie Porter (D-CA-47), June 27
- Bill Johnson (R-OH-06), June 27
In the Senate, there were six new cosponsors in June, bringing the total number of cosponsors to 20, including the bill’s leads.
- Angus King (I-ME), June 1
- Bill Cassidy (R-LA), June 1
- Debbie Stabenow (D-MI), June 8
- Mike Rounds (R-SD), June 8
- Martin Heinrich (D-NM), June 21
- Shelley Moore Capito (R-WV), June 21
Help Keep up the Momentum for AHCIA
Now is a great time for Housing Credit advocates to reach out to their Members of Congress and ask that they cosponsor the AHCIA. Congress is currently out of session on its July 4th recess and will return on July 10th. It is also a good time to start planning to take advantage of the next opportunity to meet with your Member of Congress during the August recess—the longest time Senators and Representatives spend at home for the year. The upcoming recess runs from July 29th through September 4th (Labor Day).
ACTION will be publishing and distributing an in-district advocacy guide, detailing steps you can take depending on your availability—everything from a quick post on social media if you have only a few minutes to an op-ed if you have an hour or two. If you have a bit more time, we especially encourage members to contact their Members’ offices soon to invite them to view the Housing Credit in action in their communities, including groundbreakings, ribbon cuttings, or site visits.
The ACTION Campaign has a number of advocacy materials to help support your outreach, including updated National, State, and Congressional District Fact Sheets, which were just updated in May, sample emails for outreach, as well as detailed information about the legislation in our Advocacy Toolkit. We also have a complete list of cosponsors from last Congress, where you can check if your Senator or Representative has cosponsored in the past, as well as the most up-to-date list of current cosponsors.
Senators Send Letter to Treasury Regarding Housing Credit and GSEs
On June 23, Senators Mark Warner (D-VA) and Jerry Moran (R-KS) led a bipartisan group of 20 senators in sending a letter to Treasury Secretary Janet Yellen calling on Treasury to clarify that Fannie Mae and Freddie Mac, the Government Sponsored Enterprises, or GSEs, are not Tax-Exempt Controlled Entities (TECEs) under the Internal Revenue Code. Because of the Preferred Stock Purchase Agreements between Treasury and the GSEs, some lawyers for Housing Credit investors have begun questioning whether the GSEs could be considered to be TECEs.
TECEs are not eligible for certain tax benefits that are important components of Housing Credit investors’ yield calculations, and their participation in multi-investor funds would taint the fund for all participating investors, even those who are not TECEs. Due to other investors’ concerns that the GSEs might qualify as TECEs, Fannie Mae this year decided not to participate in multi-investor funds as it had in previous years (Freddie Mac has only participated in proprietary funds since the GSEs returned to the Housing Credit equity market in 2018). Many of the multi-investor funds in which Fannie Mae had been participating invested in rural areas and were central to its approach to meeting its statutory Duty to Serve requirement. Thus, its retreat from these funds has a disproportionate impact on investment in rural areas.
In their letter, the Senators argue that the tax-exempt entity rule does not apply to the GSEs and note that the GSEs play a major role in providing financing for rural Housing Credit projects, as there are not enough banks – even those motivated by Community Reinvestment Act incentives – to provide adequate capital to such deals.
HUD Lifts Cap on Loans in Housing Credit Pilot Program
On June 8, HUD’s Office of Multifamily Housing Production announced that it will be lifting the $25 million cap on loans for a pilot program it established in 2019 that aimed to streamline Housing Credit new construction and substantial rehabilitation that also utilize Section 221(d)(4) mortgage insurance and Section 220 loan insurance. HUD explained that it undertook an analysis of the current state of the affordable housing market, in particular studying the segment utilizing the Housing Credit, and concluded that this change will further improve the streamlining process HUD hoped to achieve with the original pilot program and will simultaneously increase the incentives for borrowers and lenders to participate in the pilot.
ACTION Submits PGP Recommendations to Treasury
On June 9, ACTION submitted its recommendations for the 2023-24 Priority Guidance Plan to the Treasury Department. The recommendations largely followed those from last year; the major changes reflected dates, bill numbers, and the removal of the recommendations on the Average Income Test and COVID relief. In particular, we requested that Treasury (1) implement Violence Against Women Act provisions for Housing Credit tenants, (2) provide greater flexibility for properties suffering casualty losses, (3) include relocation expenses in rehabilitation expenditures, and (4) better restrict planned foreclosure.
In June, the ACTION Campaign welcomed 10 new members to the coalition. Please help us to welcome the following new members:
- Plumbing Manufacturers International, Virginia
- Cruz Companies, Massachusetts
- SRM Development, Washington
- Olympia Construction, Inc., Alabama
- Trailhead Developers, LLC, Colorado
- Citizens for Affordable Housing in Newton Development Organization, Inc. (CAN-DO), Massachusetts
- Noah’s Arts and Crafts, Virginia
- The Strategic Group, Georgia
- Tingerthal Group, LLC, Minnesota
- Human Solutions, Inc., dba Our Just Future, Oregon
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.
Housing Credit Research
- A recent analysis from Fannie Mae finds that Housing Credit properties exclusively serving elderly residents had lower vacancy rates than market-rate senior housing from 2019-2022 – in other words, before, during and after the peak of the pandemic. The analysis also found that vacancy rates at Housing Credit properties dedicated to families was lower than vacancy rates at similar market-rate properties throughout this period.
- A recent graduate thesis from Georgetown explores the Housing Credit’s impact in Florida. It finds that the Housing Credit causes positive externalities like better job opportunities. It also finds that the Housing Credit is associated with a decrease in low-income families in the years following a project’s PIS date and an increase in middle-income families around the same time.
Housing Credit In the News
- A June 15 interview with ACTION member the NRP Group in Connect CRE covers the benefits of the Housing Credit, despite the recent shortage of affordable housing nationwide.
- A June 27 article in Multi-Housing News covers recent developments in the Housing Credit world, including ACTION’s recent letter to Congress in support of the AHCIA.
- Identical June 28 articles in WVPE and WVXU cover AHCIA Senate Republican lead Todd Young’s affordable housing tour of Indiana, in which he will be stressing the need for passing the bill.