In 2015, supporters of the Low-Income Housing Tax Credit (LIHTC) achieved a major victory with the permanent authorization of the 9 percent LIHTC rate, but a 4 percent housing credit rate remains unauthorized. Senators Maria Cantwell (D-WA) and Orrin Hatch (R-UT) have introduced S.548, The Affordable Housing Credit Improvement Act, to permanently authorize the 4 percent rate and expand the program’s overall allocation authority by 50 percent, allowing more public housing agencies (PHAs) and local redevelopment authorities (LRAs) to access the credit.
Affordable housing stakeholders should take action today and support Sen. Cantwell and Sen. Hatch’s critical legislation by asking your senators to join the bill as co-sponsors and urging them to include this bill in any tax reform agreement that is reached. Help NAHRO achieve its goal of sending 2,500 letters to members of Congress in August.
Last week, the Senate Finance Committee held a hearing on America’s affordable housing crisis, which largely focused on the importance of the LIHTC. NAHRO’s statement for the record highlighted how PHAs and LRAs depend on this tax credit:
PHAs own and operate over 1.1 million units of federally subsidized public housing, supporting low-income families, the elderly, disabled persons, and veterans. Although the public housing inventory is an integral component of our nation’s infrastructure, chronic underfunding of the Capital and Operating Funds (the two primary funding mechanisms of public housing) has placed the inventory at risk, with a mounting capital needs backlog of well over $26 billion. PHAs turn to LIHTC to preserve and revitalize their distressed public housing inventory, and both PHAs and LRAs often take advantage of LIHTC’s leveraging power to secure other state, local, federal resources (e.g., CDBG) for affordable housing projects that revitalize their communities.
Based on HUD’s LIHTC datasets, NAHRO estimates that between 1984 and 2014, LIHTCs awarded directly to PHAs/LRAs have supported at least 53,200 low-income housing units. Additionally, the LIHTC is also important to the success of HUD’s Rental Assistance Demonstration (RAD), which allows PHAs to leverage public and private debt equity to address their capital needs backlog. HUD’s First Component RAD data shows that LIHTCs have been essential in many of the transactions closed by the Department thus far. Notably, 186 closed RAD conversions, amounting to almost 21,000 public housing units, had LIHTCs in their financing.
Take action today!