Legislative State-of-Play
Congress Passes Second Temporary Funding Bill, Averting Shutdown Again
On November 17, the President signed another Continuing Resolution, or CR, passed by Congress, extending the previous temporary spending measure for Fiscal Year 2024 (FY24) funding that was set to expire on November 17. Similar to the previous CR passed on September 30, H.R. 6363 continues to fund the government at FY23 levels, but this short-term measure is unique in that it is the first-ever “laddered” CR, meaning it establishes different expiration dates for different federal agencies.
The CR extends funding for four of the twelve spending bills, including funding for housing and community development through the Transportation, Housing, and Urban Development (THUD) and Agriculture, Rural Development, Food and Drug Administration (Agriculture-FDA), through January 19. The rest of the bills, including the Financial Services and General Government spending bill, which funds the Treasury Department and Internal Revenue Service, are funded through February 2.
At the moment, the House and Senate have not reached a deal on overall government funding levels for FY24, which is necessary before they can finalize the details of individual spending bills. This two-part CR poses a unique scenario where the government could go into a partial shutdown impacting only some federal agencies if negotiations succeed for certain spending bills but not others. For example, if the first four FY24 spending bills are not signed into law before the January 19 deadline, the agencies funded through those four appropriations streams would shut down, while those funded by the remaining eight spending bills would continue to operate through the February 2 deadline.
What this Means for the Housing Credit
Because the Housing Credit is a tax incentive and not an appropriated program, it is not directly impacted by a government shutdown. However, a shutdown at Treasury and IRS could impact those agencies’ oversight activities. Moreover, a shutdown at HUD—depending on how long it lasts—could impact other programs that are integral to ongoing operations of Housing Credit properties and the financing of new properties, for example, delays in certain subsidy layering reviews or provision of FHA insurance.
Further, the opportunity for Congress to pass a tax package hinges on passage of legislation that could serve as a vehicle for a tax title. Omnibus appropriations legislation has historically been used as such a vehicle. While it is certainly possible that a tax package could move with a “minibus”—appropriations legislation that combines some, but not all, of the 12 spending bills—the likelihood of this is unclear.
All we can do—what we must do—is keep up the pressure with our advocacy for expanding and strengthening the Housing Credit—and we have evidence that our efforts to this point are working! Media reports and ACTION’s communication with key decision-makers in Congress indicate House and Senate members are raising the Housing Credit with their chamber and party’s respective leadership, as well as with the Senate Finance and House Ways and Means Committees’ leadership. Several Members of Congress have publicly stated that the Housing Credit is a priority to include in any tax package.
To keep this critical momentum going, we are asking ACTION members and their partners to reach out to current cosponsors of the Affordable Housing Credit Improvement Act (AHCIA) and ask them to remind their party and chamber’s leaders that the Housing Credit must be included in any tax package, highlighting its broad, bipartisan, bicameral support. If you have any questions or need help or advice with reaching out to cosponsors, please let ACTION know!
November AHCIA Cosponsorship Update: AHCIA Clears 40% of Congress!
The AHCIA currently has over 40 percent of Congress cosponsoring, with supporters evenly divided by Republicans and Democrats. In the House, there were twelve new cosponsors this past month, bringing the total number of cosponsors to 186.
- Raúl Grijalva (D-AZ-07), November 2
- Gus Bilirakis (R-FL-12), November 2
- Stacey Plaskett (D-VI-AL), November 2
- Anna Paulina Luna (R-FL-13), November 2
- Nanette Diaz Barragán (D-CA-44), November 7
- Jim Baird (R-IN-04), November 7
- Elissa Slotkin (D-MI-07), November 8
- Dan Newhouse (R-WA-04), November 8
- Marcy Kaptur (D-OH-09), November 8
- Jeff Van Drew (R-NJ-02), November 8
- Lou Correa (D-CA-46), November 14
- Guy Reschenthaler (R-PA-14), November 14
We have an unofficial goal of getting to 200 House cosponsors this year. Help us meet it by reaching out to Members of your delegation who are not yet on the bill and following up with those you’ve already connected with to get them over the finish line.
Cosponsorship of the Senate version of AHCIA stands at 30 Senators, split evenly between both parties.
As of this writing, there are also 19 Senators and 9 House Democrats in the queue as we wait for more Republicans to cosponsor so that we can maintain party parity.
AHCIA Advocacy Resources
The ACTION Campaign has a number of advocacy materials to help support your outreach, including updated National, State, and Congressional District Fact Sheets, our video series detailing the provisions of the AHCIA of 2023, updated statewide ACTION Campaign member lists, an in-district advocacy guide, 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.
Administration Updates
Representatives Send Letter to Treasury Regarding Housing Credit and GSEs
On November 3, Representatives Dan Kildee (D-MI-08) and AHCIA House Lead Darin LaHood (R-IL-16) led a bipartisan group of 20 representatives 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 representatives 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. This letter builds on a similar letter that a bipartisan group of 20 senators, led by Mark Warner (D-VA) and Jerry Moran (R-KS), sent to Sec. Yellen in June, which was covered in ACTION’s July newsletter.
HUD Launches Build America, Buy America Portal
On October 31, HUD launched a Build America, Buy America (BABA) portal, which contains an overview of the requirements, policy guidance and notices, training and resources, and news and announcements. This requirement was implemented via the Infrastructure Investment and Jobs Act (IIJA, commonly known as the Bipartisan Infrastructure Law). Several ACTION Campaign members sent a letter, independently from ACTION, to the White House in March of this year raising concerns that BABA application to direct spending affordable housing programs could increase the cost of production.
IRS Publishes Housing Credit Multiplier for 2024
On November 9, the IRS published Revenue Procedure 2023-34, which, among other things, outlines the Housing Credit allocations for 2024. The 9 percent multiplier will be $2.90 per capita (a 15¢ increase from 2023); the 9 percent small-state minimum allocation will be $3,360,000; the private activity bond (PAB) multiplier will be $125 per capita; and the PAB small-state minimum will be $378,230,000 (an increase of nearly $20 million from 2023).
According to analysis by ACTION member Novogradac, these numbers are particularly notable. First, the increase in the 9 percent per-capita multiplier is tied with 2023 for the largest year-over-year increase that was not caused by legislative action, but solely due to inflation. The 9 percent small-state minimum is also at a record high for 2024. Additionally, the PAB per-capita multiplier will be at a record high in 2024. However, these inflation multipliers are based on the Consumer Price Index for All Urban Consumers (CPI-U) and not on inflation of construction costs specifically, which typically exceeds overall inflation.
FHFA Requests Input on GSE DTS Plan Modifications
On November 6, the Federal Housing Finance Agency (FHFA) published a request for input (RFI) on Fannie Mae and Freddie Mac’s (collectively, the Government-Sponsored Enterprises, or GSEs) 2023 Duty to Serve (DTS) plan modifications. Comments are due on December 6 and can be submitted via this form.
ACTION Membership
In November, the ACTION Campaign welcomed two new members to the coalition. Please help us welcome the following new members:
- Louis Rudolph Homes, Washington
- Great Expectations, LLC, Washington
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 Research
- A November 2 report from Harvard’s Joint Center for Housing Studies finds that moving to Housing Credit properties has a small but positive impact on the health of birthing parents in Massachusetts.
- A November 8 Notes from Novogradac article examines the relationship between income limits, ACS data, QCTs, and DDAs. Among other things, it finds that the Very Low-Income limit cap published by HUD may artificially decrease the number of areas that qualify as QCTs and that it will likely change which areas qualify as DDAs (though not the overall population of DDAs nationwide). It also notes how the AHCIA has provisions that would improve this situation.
- A November 16 Notes from Novogradac article shows that property insurance costs for Housing Credit units increased an average of 5.9 percent in 2022, to about $545 per unit, among a proprietary database the company has compiled of about 186,000 Housing Credit properties nationwide. The analysis points out, however, that these costs and increases varied widely by geography.
Housing Credit in the News
- An October 26 article in the Santa Cruz Sentinel notes that AHCIA lead Rep. Jimmy Panetta (D-CA-19) has been named an affordable housing champion.
- A November 2 press release from the office of New York Gov. Kathy Hochul, celebrating a Housing Credit property, includes a quote from U.S. Senate Majority Leader Chuck Schumer (D-NY), who touted his longtime support for the Housing Credit.
- A November 6 interview in the Sacramento News & Review with ACTION member Housing California notes that the state’s housing crisis will not be fixed without an increase to the Housing Credit.
- A November 8 article in ABC News notes that the Housing Credit will be a key tool for rebuilding housing in Maui after the recent wildfires devastated the island.
- A November 12 New York Times article notes that AHCIA original cosponsor Rep. Brian Higgins (D-NY-26) will step down from Congress in February.
- A November 13 article in the Orange County Register explores the housing policy positions of several major candidates for the open U.S. Senate seat in California. The article notes that the top three Democratic candidates in the race, Reps. Barbara Lee, Adam Schiff, and Katie Porter, all want to expand the Housing Credit. (All three are AHCIA cosponsors.) The article also quotes Porter as wanting to quadruple the Housing Credit.
- A November 15 op-ed in The Tennessean argues for the passage of the AHCIA, and highlights the role that Tennessee’s senior Senator, Marsha Blackburn, plays as a lead cosponsor on the bill. The op-ed also notes that seven of the state’s nine representatives also cosponsor the bill.
- A November 21 press release from the Western Governors’ Association covers letters the group sent to House and Senate tax committee leadership endorsing the AHCIA.
- A November 22 article in Affordable Housing Finance covers, among other things, the prospects for including the AHCIA in a year-end tax package.
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