Capitol Connection: Affordable Housing Legislation Continues After Omni
There is the possibility that the affordable housing crisis may finally now be on the political dashboard as we start the 90-day countdown to the fall mid-term elections. An Affordable Housing Task Force, a renter’s credit, a refundable tax credit for rent-burdened households, a LIHTC increase bill, and an historic tax credit fix have been introduced by various members of Congress in recent weeks.
Meanwhile the ACTION Campaign is focused on continuing efforts to support the Affordable Housing Credit Improvement Act, which includes the 50% cap increase in the 9% LIHTC and the fix 4% credit floor, and we continue the push to get some, or all, of the bill acted on this year. The co-sponsorship count is high for both HR 1661 and S548, and the respective House and Senate champions, Rep. Carlos Curbelo (R-FL) and Sen. Maria Cantwell (D-WA), continue to look for any-and-all avenues to further the bills.
Half Empty or Half Full?
Thanks to Senator Todd Young (R-IN) who introduced the Task Force on the Impact of the Affordable Housing Crisis Act, a proposal that would create a bi-partisan group to examine and respond to the affordable housing crisis. Joining Senator Young in the effort are Senators Cantwell, Rubio (R-FL), Coons (D-DE), Gardner (R-CO), King (I-ME), Jones (D-AL), Heller (R-NV) and Kaine (D-VA). While many think we don’t need another housing study (remember the Bipartisan Housing Commission and Millennial Housing Report?), the timing of this task force could very well synch up with potential 2019 infrastructure action. Increased recognition of our rental housing crisis is a very good thing, especially when we have congressional members leading the charge for the first time.
A Big Cost – But Production Needed
Potential presidential candidates have started to look at the affordability question. Senator Kamala Harris (D-CA) has introduced the Rent Relief Act, a proposal that would create a refundable tax credit for renters paying more than 30% of their gross income on housing, annually. This proposal would address the financial strain confronting the growing renter demographic and existing households. The smaller question is, with the new household deductions placed into the Code last fall (up to $24,000) for lower bracket incomes, can burdened renters utilize the credit? A bigger question is how does Congress approve such a large spend on a proposal that does not create a single new unit of affordable housing? Similarly, along with a call to end exclusionary zoning (yes please), Senator Cory Booker (D-NJ) has introduced a refundable credit proposal for those who spend more than 30% of their income on rent.
Out of the Blue
Congressman and Assistant Minority Leader James Clyburn (D-SC has introduced HR 6542, legislation that would amend the code to increase the 9% credit percentages and increase the state allocations to offset the reduction in housing resources that resulted from the 21% corporate tax rate. Rep. Suzan DelBene (D-WA) is also supporting the bill as a co-sponsor. Current co-sponsors total 23, all of them Democrats. Interesting that ranking Ways and Means Member Rep. Richard Neal (D-MA), who could become the chairman if the House flips, is not one of them.
OK This Works
And Congressmen Darin LaHood (R-IL) and Earl Blumenauer (D-OR), along with Senators Bill Cassidy (R-IL) and Ben Cardin (D-MD) introduced the Historic Tax Credit Enhancement Act (HR 6081 and S 3058) in Congress. This proposal would eliminate the depreciable basis reduction required when using the HTC in conjunction with other tax credits including the LIHTC, adding much needed resources to these deals. Senate co-sponsors include Sens. Susan Collins (R-ME), Sherrod Brown (D-OH), and Johnny Isakson (R-GA), which represents a good start for this excellent piece of legislation.
Yes, there is more to come in September - stay tuned.
Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax-related penalties. This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.