Legislative State-of-Play
Reconciliation Process Still Unclear in Congress
The 119th Congress is now well underway, but Republican leaders in the House and Senate are still at odds over the strategy for advancing the Trump Administration’s priorities — namely whether to move one large reconciliation bill encompassing border security, energy, tax, and other agenda items, as favored by House leaders, or to split off tax into a second reconciliation bill, as favored by Senate leaders. As a reminder, under budget reconciliation, the first step is for the House Budget Committee to produce a budget resolution providing instructions to specified committees on how to proceed, followed by consideration of the reconciliation bill (or bills).
Last week, at a House Republican retreat in Florida with the President, Speaker Mike Johnson (R-LA-04) set forth an aggressive schedule for the one bill approach with the intention of unveiling a budget resolution this week followed by House passage later this month, but that plan is already meeting with obstacles. Punchbowl News reported just this morning that a budget resolution will not be ready this week, which risks delaying the entire process.
President Trump has repeatedly indicated that he is less interested in the process than he is in the outcome. For advocates, we must be prepared for both scenarios, and ensure that Congress understands the urgent need to prioritize affordable housing.
The Housing Credit and the Affordable Housing Credit Improvement Act (AHCIA) have earned strong bipartisan support in both chambers of Congress. Because reconciliation rules require legislation to have a fiscal impact, ACTION is focusing its advocacy on the production provisions in the AHCIA — the increase in 9 Percent Credit authority, the lower bond financing test, and the basis boosts — rather than programmatic changes that would not be eligible to move through this process.
Please reach out to your Member of Congress to tell them that they should push for all of the AHCIA’s production provisions to be included in the tax package. There are also many new Members of Congress who we must educate on the Housing Credit’s proven track record and impact in their districts and states.
Check out the ACTION Advocacy Toolkit for national, state, and district fact sheets, as well as many other education and advocacy resources for your congressional outreach.
AHCIA Reintroduction Coming Soon
ACTION leadership recently met with the AHCIA bill leads and are working together on the bill’s reintroduction. Given the timing and urgency with the tax and reconciliation plans in Congress, we do not anticipate many changes to the bill this Congress. This will make it easier to quickly add supporters from the bill last Congress, which secured a record-breaking 309 cosponsors across the two chambers.
Please contact your Member of Congress now and encourage them to reach out to Reps. Darin LaHood (R-IL-16) and Suzan DelBene (D-WA-01), or Sens. Todd Young (R-IN) and Maria Cantwell (D-WA), to get on the bill when it is reintroduced. ACTION will continue providing updates and share new fact sheets upon reintroduction.
Importance of Housing Credit Raised in Two House Ways and Means Committee Hearings
During two January hearings in the House Ways and Means Committee, the Housing Credit was mentioned as a critical tool for investing in affordable housing. In the first hearing on January 14, which was about the impacts of extending the provisions from the Tax Cuts and Jobs Act of 2017, witnesses noted that the Housing Credit has had a longstanding positive impact on many Americans. In the second hearing, on January 22, in which off-committee members of the House present the Committee with their tax priorities for the year, several House members raised the Housing Credit as a critical tool for addressing the affordable housing crisis. ACTION thanks Reps. Erin Houchin (R-IN-09), Young O. Kim (R-CA-40), Burgess Owens (R-UT-04), and Emanuel Cleaver II (D-MO-05) for speaking positively about the Housing Credit or the AHCIA.
Administration Updates
Bessent Confirmed, Sworn In as Treasury Secretary
Scott Bessent was sworn in as Treasury Secretary on January 28, after being confirmed by the Senate with bipartisan support the previous day. As covered in the December newsletter, Bessent is a hedge fund manager by trade. During his January 16 confirmation hearing in the Senate Finance Committee, Bessent spoke several times about the housing shortage and pledged to work with Congress and the Administration to address the crisis.
In his written responses to questions posed by the Finance Committee, Bessent reiterated his intention to work with Congress on tax reform to increase the supply of affordable housing and make housing more affordable for Americans, though he did not speak to the Housing Credit program specifically. ACTION looks forward to working with Secretary Bessent on the Housing Credit.
Trump Administration Freezes Financial Assistance; Later Withdraws Freeze
On January 27, the White House published a memo ordering a temporary freeze of all federal financial assistance payments and a review by all federal agencies of financial assistance programs to ensure they comply with over a half-dozen executive orders issued by the President. On January 28, the day the freeze was to go into effect, the White House published a list of programs that would be reviewed under the funding freeze, which included the Housing Credit, Private Activity Bonds (which are required to unlock the 4 Percent Credit), and the majority of key HUD programs. The White House simultaneously published a clarifying memo stating that rental assistance would not be impacted. Minutes before the freeze was to go into effect, a federal judge temporarily blocked it in response to a lawsuit. On January 29, the White House rescinded the memo, but the White House Press Secretary separately stated that the funding freeze itself was not rescinded. Also on the 29th, another federal judge blocked the freeze from going into effect, in response to a separate lawsuit.
At this time, the situation remains in flux. ACTION will continue to monitor events and share relevant information as it develops pertaining to the Housing Credit and other housing programs integral to Housing Credit developments.
Biden Declares Los Angeles Wildfires Federal Disasters, Allowing Relief for Housing Credit
On January 8, then-President Joe Biden declared the Los Angeles County wildfires to be a major federal disaster, following a similar state-level declaration made by California Gov. Gavin Newsom the prior day. These declarations enable the state to allow deadline extensions to properties that have been awarded Housing Credits or tax-exempt bonds but had not yet been placed in service or met construction financing closing deadlines (see IRS Revenue Procedures 2014-50 and 2014-49 for more detail).
ACTION will continue to push Congress to make supplemental allocations of Housing Credits to communities impacted by recent disasters and will also continue to urge Congress to pass the AHCIA, which has a section to improve the casualty loss provision in current Housing Credit law.
IRS Chief Resigns to Make Way for Trump Nominee
On January 20, IRS Commissioner Danny Werfel stepped down from his position, despite having several years left on his term, which ends in 2027. As covered in the December newsletter, President Trump nominated former Rep. Billy Long (R-MO-07) to be the next IRS Commissioner. During the 117th Congress, Rep. Long cosponsored the AHCIA.
IRS Opens Application Period for Low-Income Communities Bonus Credit
Recently, the IRS opened the 2025 application period for the Low-Income Communities Bonus Credit program, which is a tax credit that provides a 10- to 20-percent boost on top of existing clean energy tax credits for qualifying projects. The total amount of power available for Housing Credit properties and other affordable housing properties in the 2025 program year is 243,560.93 megawatts. The deadline to apply is Friday, February 14, at 11:59 pm ET.
ACTION Membership
In January, the ACTION Campaign welcomed one new member to the coalition. Please join us in welcoming the following new member:
- Perci PBC, Massachusetts
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
- On December 11, Congress’ Joint Committee on Taxation (JCT) published its annual estimates of federal tax expenditures for Fiscal Years (FY) 2024-2028; JCT estimated that the Housing Credit will cost $71.8 billion from FY24-28, which is an average of $14.36 billion per year. An analysis by ACTION member Novogradac & Co. notes that this projection has decreased 0.3 percent compared to last year’s estimate. However, these are the immediate, short-term costs to the federal government, and do not reflect the long-term economic and societal benefits to communities, families, and businesses that the Housing Credit provides.
- A January 9 analysis of insurance costs for Housing Credit properties by ACTION member Novogradac & Co. shows that in 2023, the year with the most recent complete data available, the median per-unit insurance cost for Housing Credit properties was nearly $700, an increase of over 22 percent from 2022. This year-over-year increase was a record spike by dollar amount and by percentage since data started being collected on this issue in 2016, and was the sixth straight year of per-unit increases. Since 2016, median per-unit insurance costs at Housing Credit properties have increased nearly 144 percent, almost triple the average increase across all expense categories.
- On January 16, the U.S. Conference of Mayors published a survey on the housing needs and priorities of mayors across the country, which revealed overwhelming support of the Housing Credit. Of the mayors who responded, 77.5 percent said protecting the Housing Credit is “extremely important” – a degree of support higher than any other federal affordable housing program – while another 11.5 percent said doing so is “very important.” Similarly, 84 percent of mayors said that increasing the Housing Credit is either “extremely important” or “very important.”
Housing Credit in the News
- A January 13 white paper published by the George W. Bush Institute at Southern Methodist University urges Congress to, among other things, lower the Private Activity Bond threshold test for the Housing Credit, which is a key provision within the AHCIA that will finance the creation and preservation of more affordable housing units.
- On January 16, the Bipartisan Policy Center endorsed the AHCIA and urged Congress to pass it. The BPC’s letter to Congress placed the AHCIA first among six bipartisan bills they encouraged Congress to pass to address the housing crisis.
- In a January 23 article in The Hill, House Minority Leader Hakeem Jeffries (D-NY-08) noted that he supports the Housing Credit. Leader Jeffries has never cosponsored the AHCIA, so this indication of support is welcome news.
