November 8, 2018

2018 Midterms: Election Recap and Advocacy Outlook

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Tuesday’s election was historic for voter turnout, with many states recording levels of voter participation not seen for a non-presidential election in decades. The New York Times estimated that approximately 114 million Americans voted, compared to just 83 million in 2014. And while there remain a number of races that are too close to call, we know that when the 116th Congress convenes in January, the House of Representatives will be under Democratic control and Republicans will maintain, and likely expand their majority in the Senate.

The next Congress will be a divided government, presenting advocates with both potential challenges and opportunities. There are also critical opportunities for affordable housing and community development programs in the remaining months of 2018 requiring strong advocacy.

Legislative Outlook and Advocacy Strategy in the Lame Duck

Before new lawmakers are sworn in, the current Congress will return to work next week for its lame duck session. Finalizing FY19 appropriations will be a high priority in the remainder of this year since the current continuing resolution funding many government functions, including key affordable housing and community development programs expires on December 7. However, with new House leadership coming in January, it is unclear if lawmakers will be able to pass the remaining spending bills this year. Another continuing resolution or even a shutdown remain very real possibilities.

There is also the potential for Congress to consider a tax package this year, which could provide an opportunity to strengthen and expand the Low-Income Housing Tax Credit (Housing Credit) and make the New Markets Tax Credit (NMTC) permanent. NMTC is set to expire at the end of 2019, but there is strong bipartisan support to make the Credit permanent as part of a tax extender bill. And if Congress broadens potential legislation beyond extenders, there may be an opportunity to advance provisions from the Affordable Housing Credit Improvement Act, bipartisan legislation to strengthen and expand the Housing Credit. Housing Credit stakeholders have placed particular attention on making the minimum 4 percent Credit rate permanent, which would provide 15 – 20 percent more equity than is currently available in 4 percent deals and allow for more affordable rental homes to be developed and preserved.

Advocacy in support of the Housing Credit and NMTC will be critical when Congress returns to Washington on November 13 to ensure that these programs rise to the top of the list in any potential tax negotiations. Stay tuned to the ACTION Campaign website for updates on Housing Credit advocacy, and the NMTC Coalition website for NMTC advocacy.

Legislative Outlook in the 116th Congress

Looking ahead, new members present opportunities to continue our work educating and elevating the issues of affordable housing and community development both on the Hill and in dialogue across the country. But congressional departures will lead to shakeups in committee leadership and composition, resulting in new prospects but also uncertainty as we head in to the 116th.

Appropriations and Authorizing Committees

Senate Appropriations Committee leadership is likely to remain the same next year, with Chairman Richard Shelby (R-AL) and Vice-Chairman Leahy (D-VT) continuing to work together. However, the House Appropriations Committee will see significant shifts next Congress. Ranking Member Nita Lowey (D-NY) is expected to become Chair, but that is not guaranteed until Democratic leadership elections. On the new minority side, the retirement of Chairman Frelinghuysen (R-NJ) leaves an opening at Ranking Member on the full committee. Potential candidates include Representatives Kay Granger (R-TX), Robert Aderholt (R-AL), Tom Cole (R-OK), and Tom Graves (R-MO). Several other Republican members of the House Appropriations Committee lost their election, including Representatives Kevin Yoder (R-KS), John Culberson (R-TX), and David Young (IA-3). All three served on subcommittees pertaining to affordable housing and community development funding, and their departure will only exacerbate the need for engagement on key programs with new and returning committee members in the 116th.   

We will also see changes in leadership for authorizing committees. On the House side, Ranking Member Maxine Waters (D-CA) is the presumptive next Chair, but the departure of current Chairman Jeb Hensarling (R-TX) means there is less clarity on the GOP side. Representatives Patrick McHenry (R-NC), Blaine Luetkemeyer (R-MO), Bill Huizenga (R-MI), Frank Lucas (R-OK), and Sean Duffy (R-WI) are all in the running for Ranking Member. As for the Senate Committee on Banking, Housing, and Urban Affairs, current Chair Mike Crapo (R-ID) could retain his position, but it is possible he moves to leadership on another committee. If that is the case, Senator Patrick Toomey (R-PA) would be next in line. Senator Sherrod Brown (D-OH) is expected to continue in his role as Ranking Member.

Tax Committees

The election results will particularly impact the relevant tax committees. Rep. Richard Neal (D-MA), who is currently Ranking Member of the House Ways and Means Committee and also the lead Democratic co-sponsor on the House version of both the Affordable Housing Credit Improvement Act (H.R. 1661) and the NMTC Extension Act (H.R. 1098), is expected to take over as Chairman, while current Chairman Kevin Brady (R-TX) will likely serve as Ranking Member. High turn-over among Republican members currently on the Ways and Means Committee, including several co-sponsors of H.R. 1661, will result in a lot of new Committee members and the need for education around the Housing Credit.

Senate Finance Committee leadership will also see changes, with current Chairman Orrin Hatch (R-UT) and lead Republican sponsor on the Senate version of the Affordable Housing Credit Improvement Act (S. 548) retiring at the end of this Congress. Either Senator Chuck Grassley (R-IA) or Senator Crapo are expected to take over as Chair of the Finance Committee, and Senator Ron Wyden (D-OR) will likely continue as Ranking Member. However, Bill Nelson’s (D-FL) race is pending a recount, and Senators Dean Heller (R-NV) and Claire McCaskill (D-MO) lost their seats on Tuesday, meaning that there will be new Finance Committee members in the Senate in the 116th as well.

The turnover on tax committees will impact work to advance the Affordable Housing Credit Improvement Act. The legislation will require a new Republican House champion since the current House majority’s lead sponsor of the bill, Representative Carlos Curbelo (R-FL), lost his bid for reelection. The Senate version of the bill will also need a new lead Republican champion with Chairman Hatch’s upcoming retirement. Other committee members who have cosponsored the bill also will not be returning, including Representatives Erik Paulsen (R-MN) and Peter Roskam (R-IL). Further, Senators Heller and Nelson (again, pending a recount) were co-sponsors of S. 548 but will (potentially) not be returning to Congress next year.

While there are clearly still a lot of questions, the bottom line is that in both this year and next, strong engagement will be critical to advancing affordable housing and community development policy priorities. And while the 2018 elections have just ended, we can expect to see candidates for the 2020 presidential election making announcements soon, providing another opportunity to highlight affordable housing issues at the national level.

Finally, it’s important to note that in addition to all the action at the federal level, there were also many critical state and local races and ballot measures. Read more about those developments in Enterprise’s blog post “2018 Midterms: A Referendum on Washington? Not so fast”. For ongoing updates on federal, state, and local advocacy, stay tuned to Enterprise’s blog, newsletters, and the Action Campaign.