The legislation would increase investment in affordable housing, resulting in thousands of new units.
The National Lumber and Building Material Dealers Association has provided an update on the Affordable Housing Credit Improvement Act.
Last week, a bipartisan group of legislators in the House and Senate reintroduced the act (S. 1136/H.R. 2573) which would strengthen the Low-Income Housing Tax Credit (LIHTC) to increase investment in affordable housing, build tens of thousands of new affordable units across the country and better serve hard-to-reach communities.
The Affordable Housing Credit Improvement Act was first introduced several years ago and certain provisions, such as the permanent minimum 4% LIHTC rate, were included in the COVID relief law signed last December. The legislation this year seeks to build off those reforms by including provisions from previous bills as well as new provisions to make the LIHTC even more effective.
Grassroots action from NLBMDA members was instrumental in building bipartisan support for the LIHTC improvements when it was signed into law by President Trump last year.
To build on this momentum, the NLBMDA is encouraging members ato reach out to their legislators and request that they cosponsor and vote for the updated version of the bill in the 117th Congress.
The bill was introduced in the Senate by Sens. Maria Cantwell (D-WA), Todd Young (R-IN), Ron Wyden (D-OR) and Rob Portman (R-OH). The House bill was introduced by Reps. Suzan DelBene (D-WA), Jackie Walorski (R-IN), Don Beyer (D-VA) and Brad Wenstrup (R-OH).
According to industry estimates, this legislation will result in the production of over 2 million additional affordable homes over the next 10 years, support the creation of nearly 3 million jobs and generate more than $346 billion in wages and business income. Specifically, the bill would do the following:
Key Provisions Reintroduced:
Increase Housing Credit allocations by 50 percent over current levels to help meet the vast and growing need for affordable housing.
Enable the Housing Credit to better serve hard-to-reach communities including rural, Native American, high-poverty, and high-cost communities, as well as extremely low-income and formerly homeless tenants.
Make the Housing Credit a more effective tool for preserving the nation’s existing affordable housing inventory by simplifying and aligning rules.
A new provision would enable states to maximize affordable housing production and preservation by lowering the threshold of Private Activity Bond financing – from 50 to 25 percent – required to trigger the maximum amount of 4 percent Housing Credits, which is needed for financial feasibility.
Accelerate implementation of the allocation increase from the previous five years to two years, taking into account the increased and urgent need for affordable housing.
Improve the Housing Credit student rule provision to clarify that formerly homeless youth and victims of human trafficking are eligible for affordable housing even if they are full-time students.
Update the casualty loss provision from prior versions of the bill to allow for a longer rebuilding period after natural disasters if necessary, as determined by the state housing agency.