Government Shutdown Narrowly Avoided…For Now
With just hours to spare before the October 1 start of Fiscal Year 2024 (FY24), the Senate passed a Continuing Resolution (CR) (H.R. 5860), which passed earlier that day when nearly all House Democrats joined most of the House Republican majority to keep the government running. The legislation, which will fund the government through November 17 (largely at FY23 levels), was signed immediately by President Biden, averting a shutdown by funding the federal government. The CR will give more time for congressional negotiators to reach an agreement on several sticking points, including significant deltas between the two chambers’ FY24 appropriations bills’ funding levels, in addition to proposals on emergency funding for Ukraine and border security.
Why Does this Matter for the Housing Credit?
While the Housing Credit isn’t a direct part of the appropriations process, appropriated resources like HUD’s HOME Investment Partnerships Program, Project Based Rental Assistance, and other federal programs provide critical funds to Housing Credit projects. HOME funding in particular is in jeopardy, as the House Appropriations Committee-passed FY24 spending bill would cut that program by two-thirds. At the same time, a tax package, which leaders of the congressional tax-writing committees are currently discussing, will likely need to hitch a ride on a legislative vehicle, which could be an eventual FY24 omnibus spending bill.
This is one of the reasons ACTION and its members’ advocacy and efforts to build cosponsorship for the Affordable Housing Credit Improvement Act (AHCIA) is so important. A key part of this work included a letter ACTION sent to congressional leadership signed by 184 local government leaders in support of the AHCIA. The letter, coordinated in partnership with the National League of Cities, the National Association of Counties, and Mayors & CEOs for U.S. Housing Investment, demonstrates the broad bipartisan and geographical support for the Housing Credit from leaders of localities of all sizes. The letter has more than double the number of signatures a similar letter ACTION sent in the 117th Congress had. The letter received coverage in POLITICO’s Morning Tax newsletter and in Crain’s Chicago. For more information, check out ACTION’s press release and please share the letter with your Member of Congress!
Evidence our Advocacy is Working!
Last week, the AHCIA reached a cumulative 200 cosponsors across the House and Senate bills (more details below in our cosponsor update). This kind of bipartisan, bicameral support has not gone unnoticed. At a Punchbowl News discussion on September 20, Ways & Means Chair Jason Smith (R-MO) noted strong bipartisan support of the Housing Credit, including from his counterpart in the Senate, Finance Committee Chair Ron Wyden (D-OR), who is an AHCIA bill lead. Chair Smith indicated his willingness to include some sort of tax extender package in an end-of-year bill. If this ends up being the case, we will still need the highest possible AHCIA cosponsorship numbers to be included. In addition, in the POLITICO coverage of the Local Government Leaders’ ACTION letter, the reporter noted that Senate Finance Committee Ranking Member Mike Crapo (R-ID) brought up the Housing Credit as a topic that will be in the year-end mix as a follow-up to earlier comments from Chair Smith.
September AHCIA Cosponsorship Update
In the House, there were eight new cosponsors, bringing the total number of cosponsors to 170.
- Jan Schakowsky (D-IL-09), September 1
- Mike Flood (R-NE-01), September 1
- Haley Stevens (D-MI-11), September 8
- Scott DesJarlais (R-TN-04), September 8
- Becca Balint (D-VT-AL), September 13
- Laurel Lee (R-FL-15), September 13
- Anna Eshoo (D-CA-16), September 13
- Alexander X. Mooney (R-WV-02), September 13
In the Senate, there were two new cosponsors, bringing the total number of cosponsors to 30.
- John Boozman (R-AR), September 26
- Sherrod Brown (D-OH), September 26
As of this writing, there are also 17 Senators and 15 House Democrats in the queue, waiting to be added to the bill as more Republicans come on board, maintaining party parity.
Help Keep up the Momentum for AHCIA
The first batch of ACTION’s video series, detailing the provisions of the AHCIA of 2023, is posted! In these videos, NCSHA Director of Tax and Housing Advocacy Jennifer Schwartz and Enterprise Senior Director of Public Policy Ayrianne Parks provide an overview of the bills’ specific provisions. A second and third series of videos will be released in the coming weeks. Please share them widely to promote the AHCIA and use these videos in your advocacy efforts!
The ACTION Campaign has a number of advocacy materials to help support your outreach, including National, State, and Congressional District Fact Sheets, statewide ACTION Campaign member lists, an in-district advocacy guide, sample emails for outreach, as well as detailed information about the AHCIA 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.
Senate Banking Hearings on Insurance and Housing Supply
On September 7, the Senate Banking Committee held a hearing on the current crisis in the property insurance market. ACTION member National Church Residences served as one of the witnesses, providing excellent insights into how this crisis is impacting the affordable multifamily rental segment of the housing industry, particularly how it threatens Housing Credit property owners’ ability to provide necessary maintenance, services, and amenities while keeping rents affordable. The hearing explored the pros and cons of various policy proposals that could be enacted federally, by states, and by the private sector.
On September 12, the Senate Banking Committee’s Subcommittee on Housing, Transportation, and Community Development held a hearing on Housing Supply and Innovation. Among the various solutions and innovations witnesses and senators discussed to increase the supply of affordable housing, one was to expand the Housing Credit.
ACTION will be working with its members to explore policy proposals to alleviate this burgeoning crisis.
Global Minimum Tax
In early September, the House Ways & Means Committee’s Republican majority sent a delegation to Europe to discuss Pillar II of the Global Minimum Tax (GMT) with leaders from the OECD, which is administering the deal, and various European finance ministers. Ways & Means Chair Smith and the rest of the delegation are strong opponents of Pillar II and met with as many senior officials as possible to express their concerns about the tax regime.
As a reminder, the Treasury Department announced in February that the Housing Credit is protected under Pillar II, according to OECD’s guidance published that month. This fact remains unchanged under OECD’s updated guidance published in July. As covered in ACTION’s August newsletter, a senior Treasury official explained in a Ways & Means hearing that Treasury officials went to great lengths to educate the OECD about the importance of protecting the Housing Credit. ACTION was one of 30 organizations that sent a letter to Treasury Secretary Janet Yellen in 2022 urging the protection of the Housing Credit under the GMT. ACTION will continue monitoring this issue and how it may impact the Housing Credit.
HUD Publishes DDA & QCT Information
On September 21, HUD published designations for 2024 Difficult-to-Develop (DDAs) and Qualified Census Tracts (QCTs) across the country in the Federal Register. Housing Credit properties built in DDAs or QCTs can receive a basis boost of up to 30 percent. The DDAs and QCTs go into effect for Housing Credit allocations made after December 31, 2023, or for PAB-financed properties that are placed in service after December 31, 2023.
IRS Updates CAMT Guidance
On September 12, the IRS published updated guidance for the new Corporate Alternative Minimum Tax (CAMT). The new CAMT was enacted by the Inflation Reduction Act of 2022. A 2022 Notes from Novogradac article explains that the Inflation Reduction Act contains a carve-out protecting the Housing Credit from CAMT. ACTION will continue monitoring this issue and how it may impact the Housing Credit.
Final Davis-Bacon Rule to Go into Effect
On October 23, a final rule published by the Department of Labor pertaining to the Davis-Bacon Act of 1931 and related laws will go into effect. This rule is the first comprehensive regulatory update to Davis-Bacon in almost four decades. The nearly-100-year-old law requires that federal contractors pay local prevailing wages to mechanics and laborers working on construction projects funded by the government. For the Housing Credit, this law only applies to properties that also have federal subsidies.
Low-Income Communities Bonus Credit Application to Open
On September 27, the Treasury Department, the IRS, and the Department of Energy (DOE) announced that the Low-Income Communities Bonus Credit, also known as Section 48(e) – pronounced “forty-eight little-E,” will be open for applications at 9am Eastern Time on Thursday, October 19. The credit is intended to incentivize investments in clean energy in underserved communities and was created by the Inflation Reduction Act. This credit can be stacked with the Housing Credit. More information can be found on this DOE page.
Still Waiting on new Community Reinvestment Act Regulations
The widely anticipated update to the Community Reinvestment Act rules could come out as early as this month. How the banking regulators — the Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, and Federal Reserve — treat Housing Credit investments for purposes of CRA credit will have a massive impact on investor appetite for the Housing Credit and subsequent pricing. Stay tuned for more information once the regulations come out.
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.
Housing Credit in the News
- In a September 3 appearance on Fox News Sunday, the Chair of the White House Council of Economic Advisers, Jared Bernstein, again touted President Biden’s FY24 Budget Proposal, which includes provisions to expand the Housing Credit. Read the transcript here.
- A September 7 press release from Rep. Lori Chavez-DeRemer (R-OR-05) touts her cosponsorship of AHCIA, among other things. A September 7 article from KTVZ covers the same.
- A September 12 article in Bloomberg / CityLab notes that rising property insurance rates are delivering immense harm to affordable housing developers. The article quotes ACTION members David Gasson of the Housing Advisory Group, Michelle Norris of National Church Residences, Sharon Wilson Géno of the National Multifamily Housing Council, and Barry Kahn of Hettig/Kahn Development.
- In a September 13 interview with Multi-Housing News, Aaron Pechota, EVP of ACTION member NRP, mentions that expanding the Housing Credit is crucial for expanding the supply of affordable housing.
- A September 14 speech by Rep. Rudy Yakym (R-IN-02) during a House Ways & Means Committee hearing outlined the freshman congressman’s legislative priorities, including his cosponsorship of the AHCIA. Representative Yakym succeeded the late Rep. Jackie Walorski, who was the House Republican lead on AHCIA in the prior Congress.
- The September 21 edition of POLITICO’s Morning Tax newsletter covers ACTION’s Local Government Leaders’ letter in support of the AHICA.
- A September 26 article in Crain’s Chicago covers ACTION’s Local Government Leaders’ letter in support of the AHCIA, particularly from an Illinois point of view and quotes House bill lead Darin LaHood.
- A September 28 press release from the House New Democrat Coalition highlights their Affordable Housing Task Force’s meeting with the CEO of the National Association of Home Builders, an ACTION Steering Committee member.