WASHINGTON – The A Call to Invest in Our Neighborhoods (ACTION) Campaign sent a letter signed by over 2,500 businesses, nonprofits, and public agencies to congressional leaders today, calling for them to enact legislation to address the nationwide affordable housing challenges before the end of this Congress by expanding the reach of the Low-Income Housing Tax Credit (Housing Credit). The ACTION Campaign, which represents national, state and local affordable housing stakeholders across the country, notes that the Housing Credit is a model public-private partnership and our country’s number one tool for producing and preserving affordable rental homes since it was established in 1986.
Specifically, the letter urged federal leaders to include two key Housing Credit provisions in tax extenders: (1) Expand Housing Credit authority by 50 percent, and at a bare minimum reinstate the 12.5 percent cut the Credit suffered this year; and (2) Enhance the use of existing Private Activity Bond authority for rental housing production by lowering the bond financing threshold from 50 percent to 25 percent.
Together, these two actions to increase resources for the Housing Credit would finance an additional 1.93 million affordable rental homes over the next 10 years.
“High inflation, a supply chain shortage and the continued economic impacts of the pandemic have driven rents up in every community and every Congressional district,” said Scott Hoekman, ACTION Campaign co-chair and president of housing credit investments at Enterprise Community Partners. “The Housing Credit has earned its broad, bipartisan support through the successful creation and preservation of 3.6 million homes, serving over 8 million households in the last three decades. We cannot go backward, which is why it’s so critical our federal leaders not let the 117th Congress end without providing the resources necessary to build more affordable rental housing.”
“The most important thing we can do to combat the supply-demand imbalance causing rents to skyrocket is to build and preserve more affordable housing with the Housing Credit,” said Jennifer Schwartz, ACTION Campaign co-chair and director of tax and housing advocacy with the National Council of State Housing Agencies. “Our nation has underbuilt for too long and low-income families and seniors are paying that price. Congress cannot further delay investment in housing supply; expanding the Housing Credit is the most effective way to get that done.”
As rents have risen, the cost to develop housing has rapidly increased. According to independent research by Abt Associates, nearly all developments awarded Housing Credits since 2019 have faced significant financing gaps due to higher-than-expected costs and/or project delays. This means that the country is building fewer homes with existing resources than it was just a few years ago.
Both provisions outlined in the letter are included in the bipartisan Affordable Housing Credit Improvement Act of 2021, introduced by Senators Maria Cantwell (D-WA), Todd Young (R-IN), Ron Wyden (D-OR) and Rob Portman (R-OH), and Representatives Suzan DelBene (D-WA-01), Don Beyer (D-VA-08), Brad Wenstrup (R-OH-02) and the late Jackie Walorski (R-IN-02) in April 2021. Advocates continue to urge Congress to pass the bill in its entirety, but given the likelihood that end-of-year tax legislation could be limited in scope, the letter highlights these two steps as the most crucial actions federal leaders could take to address affordability challenges nationwide.
Read the full letter from the ACTION Campaign.