Last week, 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 (S. 1136/H.R. 2573). The bill is comprehensive legislation that would expand and strengthen the Low Income Housing Tax Credit (Housing Credit). The House and Senate versions of the legislation are identical.
Highlights of the bill include:
- A 50 percent increase in the annual Housing Credit volume cap — both the per-capita amount and the small-state minimum — phased in over two years. This accelerates the cap increase compared to previous iterations of the bill from past Congresses, which had a five-year phase-in period.
- A new provision to lower the bond financing threshold from 50 to 25 percent, making more bond resources available and reducing the transactional costs associated with project financing. NCSHA-commissioned research by Novogradac published today finds this provision alone could result in an additional 1.5 million units financed over 10 years.
- A state discretionary basis boost of up to 30 percent for bond-financed properties, providing parity between the 9 percent component of the program, where states have this discretion already, and the 4 percent component of the program.
- A 50 percent basis boost for projects that reserve units for extremely low-income households at applicable rent levels.
- 30 percent basis boosts for rural and Native American areas.
- Provisions to facilitate preservation of affordable housing.
- Simplification of program rules, such as the Housing Credit student rule, 10-year rule, related-party rule, and casualty loss requirements.
- A provision to prohibit local approval requirements that can lead to NIMBYism.
- Changes to make the Housing Credit a better tool for serving veterans and victims of domestic violence.
The bill has achieved wide bipartisan support in past Congresses, leading to major victories such as the temporary 12.5 percent cap increase and enactment of the Average Income Test in 2018 and enactment of the minimum 4 percent Credit rate in 2020. In the last Congress, more than half the members of the House of Representatives and more than 40 percent of Senators cosponsored the legislation.
This year could see important opportunities to advance all or some of the AHCIA. To take advantage of those opportunities, we must quickly build cosponsorship, especially if the bill is to have a strong cosponsorship showing by the time Congress begins actively considering infrastructure legislation, which is likely later this spring and through the summer.
NCSHA and Enterprise Community Partners co-chair the ACTION Campaign, which includes more than 2,400 organizations and businesses across the country that support the Housing Credit and advocate for AHCIA. NCSHA and its ACTION Campaign partners have developed various advocacy materials, updated to reflect the new bill, that housing supporters can use to make the case for this legislation with members of Congress and other elected leaders.