The Low-Income Housing Tax Credit (Housing Credit) is our nation’s most critical tool in creating and preserving affordable homes. It works by incentivizing private investment in affordable housing. In fact, the Housing Credit is responsible for financing nearly all affordable housing development across the country. However, the program must be expanded and enhanced to meet a vast and growing need for affordable homes.
Today, Senators Maria Cantwell (D-WA), Todd Young (R-IN), Ron Wyden (D-OR) and Rob Portman (R-OH), and Representatives Suzan DelBene (D-WA), Jackie Walorski (R-IN), Don Beyer (D-VA) and Brad Wenstrup (R-OH), introduced the Affordable Housing Credit Improvement Act (AHCIA) of 2021. The identical bicameral and bipartisan bills would strengthen and expand the Housing Credit.
“Enterprise appreciates the leadership of Senators Cantwell, Young, Wyden and Portman, as well as Representatives DelBene, Walorski, Beyer and Wenstrup on the Affordable Housing Credit Improvement Act of 2021,” said Priscilla Almodovar, president and chief executive officer of Enterprise Community Partners. “This bill will address the shortage of affordable housing that has impacted so many families across the country, both now and before the pandemic.”
Three major provisions of the legislation are estimated to finance two million additional affordable rental homes over ten years. These include a 50 percent increase in Housing Credit authority, phased in over two years, as well as the provision to increase and streamline Housing Credit developments financed with tax-exempt bonds by reducing the “50 percent test”—the percentage of project costs required to be bond-financed—to 25 percent. It also includes a provision granting state agencies greater flexibility in applying a “basis boost” to certain difficult-to-develop projects.
Changes from previous versions of the AHCIA include an improvement to 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, and an update to the casualty loss provision to allow for a longer rebuilding period after natural disasters if necessary.
The AHCIA also includes a number of other provisions that would help preserve existing affordable housing, facilitate Housing Credit development for extremely low-income households and in hard-to-serve communities and provide state Housing Credit allocating agencies new tools to strengthen program administration.
The AHCIA will assist Enterprise in carrying out its five-year strategic plan, including its work to increase the affordable housing supply, advance racial equity and build resilience and upward mobility for Black, Indigenous and people of color (BIPOC) communities.
“Our work is grounded in the need to increase the supply of affordable homes and fix the inequities that have made it difficult for BIPOC communities and historically marginalized individuals, including veterans and people with disabilities, to access them. This bipartisan effort is a positive step forward in addressing the affordable housing crisis and dismantling the legacy of systemic racism in housing policy,” said Jacqueline Waggoner, President of Solutions at Enterprise Community Partners.
Enterprise and National Council of State Housing Agencies co-lead the ACTION Campaign, which has been a key driver of Housing Credit advocacy, including for the AHCIA.
“With over 2,400 members, the ACTION Campaign is working to build on the strong legacy of bipartisan support to expand and improve the Housing Credit. We thank our Congressional champions for reintroducing the AHCIA to strengthen this critical program and will be working with our ACTION Campaign members to engage more community stakeholders in sharing the importance of the Housing Credit with their legislators,” said Scott Hoekman, president of Enterprise Housing Credit Investments, LLC, Enterprise’s Low-Income Housing Tax Credit syndication business and co-chair of the ACTION Campaign.
For more information on the bill, please see the following resources:
- AHCIA one-page summary
- AHCIA detailed bill summary
- AHCIA differences between 117th and 116th Congress
- AHCIA full bill text
You can also find these resources on ACTION’s website, at www.rentalhousingaction.org/advocacytoolkit