The Housing Credit is the number one tool for financing affordable housing in America. It has financed the creation or preservation of around four million affordable homes since its creation in 1986. With that level of success, it is not a big surprise that it has quickly become the model in the United States for other tax incentives to drive private investment for community development and more. Recently, it has also started picking up traction as a potential solution to the affordable housing shortage with our friends across the Pond. Earlier this month, I had the opportunity to join a meeting to share how the Housing Credit works to housing developers and Members of the Parliament in the United Kingdom (UK).
UK parliamentary elections earlier this year delivered an absolute majority in the House of Commons for the Labour Party after 14 years of Conservative Party rule. Like in America, the affordable housing crisis in the UK is dire, and the new Government has been exploring a wide range of actions to address the issue.
The event was hosted by Mike Reader, Member of Parliament (MP), and organized by Adam Allnutt from Homes for Britain and the Labour Housing Group Policy Officer and Chris Worrall, Fabian Society Member Policy Group, Chair Local Government and Housing. In advance of the meeting, Shaun Donovan, Enterprise CEO and President and former Secretary of Housing and Urban Development and Director of the Office of Management and Budget under President Obama, met with Mr. Allnutt and Mr. Worrall, along with Mr. Reader and Chris Curtis, MP to discuss the Housing Credit model.
“In the United States, the Low-Income Housing Tax Credit is our most successful financing tool for building and preserving affordable rental housing. By incentivizing private investment in affordable housing, the Housing Credit leverages upfront capital from investors to meet public needs without increasing public sector debt” noted Mr. Donovan in a press release on the event.
Former Enterpriser and ACTION coordinator Krista D’Alessandro, who now serves as Senior Policy Advisor for Pensions and Lifetime Savings Association in London, has been a key part of the effort in the UK to establish a tax credit for housing. Krista and I explained how the Housing Credit works and how it could potentially help the UK achieve the new Government’s goal of 1.5 million new homes for the British people. Several other U.S. experts were invited to present about the Housing Credit to Members of Parliament and key staff, including ACTION members like Andrew Lozano the Affordable Housing Tax Credit Coalition (AHTCC), and Mark Shelburne, who works for Novogradac & Co. and has been a part of the organizing effort for over a decade.
The new UK Government could create a Social Housing Tax Credit modeled on the Housing Credit in the United States. Just as the Housing Credit does here, the Social Housing Tax Credit could help increase funding for much-needed quality affordable housing in the UK by pulling in private-sector investment without adding to the UK’s public-sector debt. The interest by our UK partners further demonstrates why we have been able to build record bipartisan congressional support here—the Housing Credit is a proven model for delivering affordable housing effectively to the rural, urban, and suburban communities where it is desperately needed.
Mike Reader, MP stated in the release on the event, “We need bold action to address the housing crisis. There is no better plan to start than learning from one of the most successful social housing programmes in the world. This government is focused on delivering 1.5 million homes in this parliament and the Social Housing Tax Credit can help us achieve this.”
During the presentation, we had the opportunity to highlight the new ACTION data released in late November, showing that in addition to the financing of nearly 4 million affordable rental homes, it has served approximately 9.28 million households; supports 6.6 million jobs; has generated $268.1 billion in tax revenue; and generated $746.5 billion in wages and business income. These Housing Credit properties are located in all 435 House districts. ACTION and our Housing Credit allies know the program has a strong track record of success and is a model public-private partnership. The Housing Credit gives states appropriate flexibility to tailor the administration of the program to their unique needs, delivering affordable housing to communities across the country that otherwise would not get built.
Politically, the Housing Credit has long had strong bipartisan support in both chambers of Congress as a result of its success, but we need to expand and strengthen it. Congress is expected to consider a major tax package expected next year. We need to keep reminding our federal leaders why the Affordable Housing Credit Improvement Act is the most bipartisan bill in the House and has achieved record bipartisan support in the Senate by sharing the newly updated ACTION fact sheets and getting Members of Congress to visit Housing Credit properties over the Winter Recess. For more information on how you can help, check out our in-district advocacy guide!
