The elections taking place tomorrow are crucial in determining the road ahead for the Housing Credit. With major tax policy set to expire at the end of 2025, tax undoubtedly will be a primary focus for the next president and the incoming Congress, providing opportunities to advance changes to expand and strengthen the Housing Credit.
In perhaps the first time in memory, one of the top campaign issues is housing. While this is unfortunately a bellwether of the extent to which the housing crisis is impacting our nation, it is also an opportunity for advocates to make real progress to increase the supply of affordable rental homes. Both major-party presidential candidates outlined their policy ideas for tackling the housing shortage.
The candidates on housing
Both presidential candidates agree on the importance of bringing down the high costs of housing, and they agree on some of the needed policies to increase supply. Vice President Kamala Harris’ plan to “Create an Opportunity Economy” prioritizes the creation of 3 million homes during her proposed four years in office. She pledges to expand the Low-Income Housing Tax Credit (Housing Credit), which is the primary financing method to create and preserve affordable housing.
In addition to expanding the Housing Credit, Harris is calling for the establishment of a new Neighborhood Homes Tax Credit to develop and rehabilitate housing for homeowners, creating new tax incentives for single-family developers building starter homes, provision of down payment assistance resources, and making other policy changes to lower housing costs. President Trump has focused on regulations and ways to alleviate the cost of housing production as part of his campaign. Trump and his team cite lowering inflation and reducing immigration as two key ways to ameliorate the housing crisis.
Trump referred to zoning regulations and the often-restrictive permitting process “a killer” in a July Bloomberg interview. Harris agrees that local zoning regulations should be modified, proposing a $40 billion local innovation fund to provide state and local governments with resources to increase their housing stock. Both candidates also agree – at least to some degree – on several other ideas. Vice President Harris and former President Trump have proposed converting unused or underused federal land and property to housing, though the details of their respective proposals are somewhat different. Further, both campaigns also agree that the relatively recent trend of institutional investors purchasing scores of single-family homes in communities and converting them to rental properties is having a negative effect. Both candidates would require Congressional approval to pass many of their housing policies, so the outcome of the Congressional elections will have a strong impact on the president’s ability to achieve their goals. The degree to which either is successful will depend on the make-up of Congress, with tight margins likely in both chambers.
What’s Next: Post-Election Plans for Congress and Preparation for Next Year
Between the time when Congress returns to session on November 12 and December 20, they must either pass federal fiscal year 2025 (FY25) spending bills or pass another Continuing Resolution (CR) at FY24 levels. Usually, CRs are short-term stop gaps, but it’s also possible Congress could forego work on FY25 spending bills and pass a CR through the end of FY25.
Congress may also consider disaster relief for communities impacted by Hurricanes Helene and Milton during the lame duck session. ACTION is already advocating for any disaster package to include the two Housing Credit provisions from the Smith-Wyden tax package: a temporary restoration of the 12.5 percent increase to the 9 Percent Housing Credit that expired at the end of 2021 and a temporary change to the Private Activity Bond (PAB) threshold test, lowering it from 50 percent to 30 percent for 4 Percent Credit properties. A disaster bill could also provide an opportunity to help communities rebuild and recover through provision of emergency Housing Credit authority.
Of course, the outcome of the election – both for the presidency and Congress – will have an impact on the potential for any lame duck legislative action.
What you can do
Regardless of the election outcome, legislators will be moving full speed ahead to address the expiration of the 2017 Tax Cuts and Jobs Act provisions in late 2025. As advocates, we must ensure that expanding and strengthening the Housing Credit remains at the forefront of these tax policy conversations. There are several ways to help support these efforts.
1. Keep building cosponsorship for the AHCIA! The legislation has over 300 cosponsors in Congress, but continuing to add supporters will provide an even stronger foundation in the next Congress. It’s always easier to ask a member to cosponsor a bill they’ve supported in the past than it is to get them to put their name on something new.
2. Make Your Voice Heard! Congress wants to hear from everyday folks living in Housing Credit properties as they consider what tax policies to focus on in 2025. We are asking residents and other stakeholders to capture these testimonials and share the local, people-centered impact these federal policies have on communities. Create a short video (up to two minutes long) telling Congress why the Housing Credit is important to your business, community, or family. Be creative! Submit videos by November 11 to housingactioncampaign@gmail.com.
3. Help Grow the ACTION Campaign! Encourage your partners to join ACTION as a member and build support for the Housing Credit, including participating in Housing Credit advocacy. The ACTION Campaign’s Social Media Advocacy Guide and Advocacy Toolkit provide resources that you can use to convey the importance of passing this legislation.
Strong housing policy is more important than ever. The housing shortage has hit urban, suburban, and rural areas. The need to expand the Housing Credit is paramount, and bipartisan solutions are achievable in the “lame duck” congressional period between November and January.
