Legislative State-of-Play
Tax Package Vote Fails in the Senate
On August 1, the Tax Relief for American Families and Workers Act (H.R. 7024), which contained two Housing Credit provisions, was brought to the Senate floor for consideration. The motion to proceed with debate, requiring three-fifths of senators’ support, failed 48 to 44. While the vote fell mostly along party lines, three Republicans voted for the bill: Josh Hawley (MO), Markwayne Mullin (OK), and Rick Scott (FL). Two independents caucusing with the Democrats, Bernie Sanders (VT) and Joe Manchin (WV), joined most of the Republicans in voting against the legislation.
As previously reported, the bill was carefully negotiated by Senate Finance Committee Chair Ron Wyden (D-OR) and House Ways and Means Chair Jason Smith (R-MO-08) and sailed through the House in late January. The tax package’s Housing Credit provisions were inspired by the two of the production provisions in the Affordable Housing Credit Improvement Act (AHCIA). While the package ultimately did not secure the necessary Republican support for passage in the Senate, it is important to highlight that the housing provisions were not a point of contention and were recognized as one of the pieces in the legislation supported widely by both parties.
ACTION encourages advocates to reach out and thank the tax package’s lead negotiators, Ways and Means Chair Smith and AHCIA Senate co-lead Ron Wyden. Several of our AHCIA champions also deserve thanks for their efforts to see the Housing Credit provisions including in this package, including Sens. Maria Cantwell (D-WA) and Todd Young (R-IN), along with Reps. Darin LaHood (R-IL-16), Suzan DelBene (D-WA-01), Brad Wenstrup (R-OH-02), Don Beyer (D-VA-08), Claudia Tenney (R-NY-24), and Jimmy Panetta (D-CA-19). Senate Majority Leader Schumer also played a critical role in securing the Housing Credit provisions and bringing the bill to a floor vote.
The significant advocacy and outreach conducted by ACTION members and partners over the last several months to Congress positions us well, not only for the 2025 tax efforts, but also should any opportunities arise in the remainder of this year.
Cantwell Continues to Seek Opportunities to Advance Housing Credit Provisions in 2024
AHCIA Senate lead Maria Cantwell introduced a bill following the failed Senate vote containing the two Housing Credit provisions from Tax Relief for American Families and Workers Act. In addition to the Housing Credit, it includes a provision to revive an expired international trade program, the U.S. Generalized System of Preferences, which also has wide congressional support.
ACTION will keep members apprised of any movement. An article in Bloomberg covered this bill after it was posted to Congress.gov.
Congressional Republicans Proceed with Preparations for 2025 Tax Action
In the House, Republicans continue to proceed in their review of provisions for a highly anticipated 2025 tax package. As we’ve previously reported, Ways and Means Chairman Jason Smith created 10 tax teams in April, including one devoted to community development, including affordable housing tax policy. The Community Development Tax Team is comprised of team chair Rep. Mike Kelly (R-PA-16), vice chair Rep. Claudia Tenney (R-NY-24), and Reps. Darin LaHood (R-IL-16), Blake Moore (R-UT-01), and Mike Carey (R-OH-15) — all of whom are Housing Credit champions. The Community Development Tax Team plans to hold site visits in the coming months as they prepare their proposal for the 2025 tax package.
On August 1, Republican staff from the Senate Finance Committee and Minority Leader Mitch McConnell’s (R-KY) office held a meeting with tax policy stakeholders, including several ACTION members. Unlike the efforts among House Republicans, the efforts by Senate Finance Committee Republicans are comparatively much more behind the scenes. There are six Senate working groups, but further information has not been shared publicly, including which senators are on particular working groups. However, Finance Republicans have made it clear to stakeholders that they are not limiting their scope of work only to the provisions from the Tax Cuts and Jobs Act of 2017 and that they want to hit the ground running after the election. To that end, tax advocates have been encouraged to meet with Finance Committee offices prepared with the most recent data about the benefits of each program.
ACTION will be sharing information and data on the Housing Credit with the Finance Committee. We encourage advocates with Senators on the Committee to reach out and share data and stories on the impact in their respective states.
Don’t Forget to Weigh in with House Ways and Means Republicans on Priorities for the 2025 Tax Package
As covered above, the House Ways and Means Republican Tax Teams have requested input to inform their work. ACTION strongly encourages its grassroots members to send recommendation letters to the Community Development Tax Team, which will oversee affordable housing ideas.
To aid you, we have created a guide, including key points to include in your letters to this Tax Team and instructions for submission. PLEASE NOTE: the Tax Teams have stressed that letters should not be templates, but rather unique and personalized with stakeholders’ priorities, rationale, and impact stories. The deadline for the submissions is October 15.
What’s Next and How You Can Help Advocate
Getting a Member of Congress to a Housing Credit property to see firsthand the impact of affordable housing on their constituents and the communities they represent is the most effective way to secure and maintain support for the Housing Credit. While Congress is returning to Washington next week from their August recess, they will be at home again from September 28 through November 11. As was the case this summer, their schedules will be filling up fast with campaign events.
Members of Congress have also asked us to help them to hear from everyday folks living in Housing Credit properties as they consider what tax policies to focus on in 2025. We are asking ACTION members to help capture these testimonials and tell the local, people-centered impact these federal policies have in communities.
- Create a short video (up to two minutes long) telling Congress why the Low-Income Housing Tax Credit is so important for your community, business, or family.
- Whether you use your cellphone or a professional camera — it’s all about the story and message.
- Who the best speaker to connect with your Senators or Representative? It is ideal to hear from residents, but it could also be a community leader, a business owner, or a property owner.
- Be creative! Submit videos by November 11 to housingactioncampaign@gmail.com.
Check out the ACTION in-district advocacy guide for lots of great ideas to build support for the Housing Credit — from a quick post on social media to writing an op-ed or hosting an event. We have included templates and best practices that advocates can use to make their advocacy efforts a success. If you need assistance with invitations or planning tips, please reach out to actioncampaign@enterprisecommunity.org.
Bill Introduced in Congress to Help Housing Credit Investments in Rural Areas
On August 1, Senators Jerry Moran (R-KS), Mark Warner (D-VA), and Todd Young (R-IN), along with Reps. Darin LaHood (R-IL-16) and Dan Kildee (D-MI-08), all AHCIA cosponsors, introduced the Preserving Rural Housing Investments Act (S. 4933 / H.R. 9267), which would amend the tax code to clarify that Fannie Mae and Freddie Mac, known as the Government-Sponsored Enterprises, or GSEs, are not Tax-Exempt Controlled Entities (TECEs).
As ACTION covered in previous newsletters in December and July 2023, in recent years, some lawyers for Housing Credit investors have questioned whether the GSEs are TECEs under the preferred stock purchase agreement that put the GSEs under federal conservatorship in the wake of the Great Recession. This has caused Fannie to remove itself from multi-investor funds that invest in the Housing Credit, especially in rural areas, because the presence of a TECE in such a fund would taint the fund for all other investors. The other investors would lose valuable secondary benefits to investing in the Housing Credit, such as accelerated depreciation, bonus depreciation, some energy credits, and historic rehabilitation tax credits. Fannie’s departure from these funds has jeopardized its ability to meet its statutory Duty to Serve requirements and jeopardized the ability of the multi-investor funds to succeed in investing in critical affordable housing properties in rural areas. Rural communities desperately need affordable housing, and construction costs are often higher than in urban areas.
Relatedly, the Senate Appropriations report for the Fiscal Year 2025 Financial Services and General Government (FSGG) bill released on August 1 included language on TECE inserted by Sen. Moran (who serves on the subcommittee that wrote this bill). The legislation would direct the Treasury Department to take steps that would clarify the TECE status of the GSEs. This language is not in the House version, which the chambers would need to reconcile in any final spending legislation.
Importance of Housing Credit Raised in Senate Finance Committee Hearing
During a July 30 hearing held by the Senate Finance Committee on community development tax incentive programs, the Housing Credit was highlighted as an important tool for providing affordable housing. The hearing was held in preparation for major congressional tax action expected in 2025. Witnesses representing ACTION members Novogradac & Co., Midwest Minnesota CDC, and White Earth Investment Initiative testified at the hearing.
Though the hearing was focused on community development programs, witnesses and senators on both sides of the aisle discussed affordable housing. Several regulatory and legislative proposals were mentioned to help increase the success of the Housing Credit and ease the affordable housing crisis, including passing the AHCIA, passing the tax package, improving the ability of housing and community development tax incentives to be utilized together, and more. ACTION applauds its members who testified at the hearing and commends AHCIA champion Sen. Ron Wyden, who chaired this hearing, for holding it.
August AHCIA Cosponsorship Update: AHCIA Clears Half of Congress!
The AHCIA has exceeded half of Congress as cosponsors! In the House, there were 10 new cosponsors this past month, bringing the total number of cosponsors there to 240.
- Pete Aguilar (D-CA-33), August 23
- Joe Courtney (D-CT-02), August 23
- Jason Crow (D-CO-06), August 23
- Colin Allred (D-TX-32), August 23
- Chellie Pingree (D-ME-01), August 23
- Jim Himes (D-CT-04), August 23
- Gabe Amo (D-RI-01), August 23
- Sara Jacobs (D-CA-51), August 23
- Jerry Nadler (D-NY-12), August 23
- Steven Horsford (D-NV-04), August 23
Help us keep the momentum going! ACTION has a number of advocacy materials to help support your outreach on cosponsorship, including National, State, and Congressional District Fact Sheets, our video series detailing the provisions of the AHCIA, statewide ACTION Campaign member lists, sample emails, as well as other important 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 Senators or Representative have cosponsored in the past, as well as the most up-to-date list of current cosponsors.
Administration Updates
FHFA Provides More Details on Recent Tenant Protection Proposal
On August 28, the Federal Housing Finance Agency (FHFA) provided more details on proposals from Fannie Mae and Freddie Mac to increase protections for tenants at GSE-backed multifamily properties. These proposals, initially covered in ACTION’s August newsletter, include a 30-day notice of rent increases, a 30-day notice of lease expiration, and a five-day grace period for late rent payments, which will go into effect on February 28, 2025. The GSEs published identical FAQ documents and identical multifamily lease standards policy grids containing further details about the proposals’ applicability, implementation, monitoring, and enforcement. FHFA and the GSEs plan to continue stakeholder engagement before next February.
Federal Home Loan Bank of Chicago Launches Housing Credit Collateral Pilot Program
On August 20, the Federal Home Loan Bank of Chicago (FHLBank Chicago) announced the launch of a $300 million Housing Credit Collateral Pilot Program. This pilot program provides institutions that are members of the FHLBank Chicago with increased lendable value on collateral they pledge for qualifying mortgage loans for Housing Credit properties. Up to $200 million of the $300 million will be reserved for FHLBank Chicago members that have assets under $1.46 billion, including Community Development Financial Institutions (CDFIs). The pilot program will only be available for three years, through August of 2027.
According to the announcement, loans used as gap financing for Housing Credit properties are often smaller than loans for market-rate housing, which can make these loans more expensive or harder to finance. However, loans for Housing Credit properties, like many other types of loans, can be bundled and sold to investors. This pilot program aims to incentivize lending to support the Housing Credit.
ACTION Membership
In August, the ACTION Campaign welcomed three new members to the coalition. Please join us in welcoming the following new members:
- Boise / Ada County Homeless Coalition, Idaho
- Struggle for Miami’s Affordable and Sustainable Housing, Inc. (SMASH), Florida
- S3 Advisory Services, 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 to follow and join us.
Housing Credit Research
- An August 1 article in the Novogradac Journal of Tax Credits does a deep dive into the growth in the use of private activity bonds (PABs) for financing affordable housing. The article finds that, since 2016, the use of PABs to finance multifamily affordable housing, especially paired with the 4 Percent Housing Credit, has surged, a trend that has largely continued even in the face of headwinds such as higher interest rates and construction costs. The analysis surmises that these trends are in part due to several factors such as increased demand stemming from the pandemic and the enactment of the 4 Percent Housing Credit minimum rate in 2020. The article notes that as of May, 31 states are oversubscribed or are essentially at parity for their annual PAB cap. The article concludes by urging Congress to pass the AHCIA.
- An August 2 analysis by ACTION member Novogradac & Co. highlights the fact that over 90,000 Housing Credit properties will reach the end of their 15-year initial compliance period this year, which is a significant increase compared to recent years. This increase can be traced back to the influx in extra financing for Housing Credit properties authorized by two laws enacted to accelerate the economic recovery during the Great Recession, which resulted in more affordable housing units financed by the Housing Credit being built in the late 2000s.
- An August 8 blog post by ACTION member Novogradac & Co. examines the impact of the Housing Credit and the projected benefits of enacting the AHCIA across the country and especially for the communities represented by the members of the House Republican Ways and Means Committee’s Community Development Tax Team. The blog post calls on Congress to pass the AHCIA and urges advocates to submit comments to the Tax Team portal by the October 15 deadline.
Housing Credit in the News
- In August, the Democratic National Committee published its 2024 policy platform, which explicitly calls for expanding the Housing Credit to finance the construction or preservation of an additional two million homes nationwide. This is in line with the Biden-Harris Administration’s support for the Housing Credit and the estimated impact of the financing provisions of the AHCIA.
- An August 5 article in The Ripon Advance covers the introduction of the Preserving Rural Housing Investments Act.
- An August 8 article in Kansas’ Liberal First covers the introduction of the Preserving Rural Housing Investments Act.
- Two August 15 tweets from Rep. Adrian Smith (R-NE-03) and AHCIA original cosponsor Rep. Randy Feenstra (R-IA-04) highlighted a recent meeting they held about the Housing Credit with ACTION member Midwest Housing Equity Group.
- In an August 16 column, AHCIA original cosponsor Rep. Randy Feenstra (R-IA-04) highlighted the success of the Housing Credit and touted his efforts to expand and strengthen it.
- An August 16 newsletter by the Harris-Walz Campaign mentions the Campaign’s plan to expand the Housing Credit.
- An August 16 article in Bisnow covers the Harris-Walz Campaign’s plan to expand the Housing Credit.
- An August 19 op-ed in The Hill by Govs. Tina Kotek (D-OR) and Spencer Cox (R-UT) urges Congress to expand the Housing Credit and (belatedly) urges the Senate to pass the tax package containing Housing Credit provisions.
- An August 20 article in Tax Notes covers the Harris-Walz Campaign’s plan to expand the Housing Credit.
- An August 20 article in CNBC covers the Harris-Walz Campaign’s plan to expand the Housing Credit.
- An August 21 op-ed in the Washington Post argues that the Harris-Walz Campaign’s plan to expand the Housing Credit could help ease the nation’s affordable housing crisis.
- An August 22 article in Affordable Housing Finance covers the $300 million pilot program launched by the FHLBank Chicago explained above.
- An August 27 article in GZERO Media compares and contrasts the housing policies proposed by the Harris-Walz Campaign and the Trump-Vance Campaign.
- An August 27 op-ed in the N’West Iowa Review by AHCIA original cosponsor Rep. Randy Feenstra details his work to expand the Housing Credit and how the program benefits his constituents and people across the country.
- An August 28 op-ed in U.S. News & World Report by the former chief economist for the Treasury Department notes that increasing the Housing Credit, as proposed by the Harris-Walz Campaign, will help alleviate the housing crisis, and explains that incentivizing the construction of affordable housing is the best way to increase its supply.
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