AFFORDABLE HOUSING FINANCE
LIHTC Increase Included in Spending Bill
The housing credit would be expanded by 12.5% over four years.
Note: This story was updated on March 23, 2018.
The low-income housing tax credit (LIHTC) program will receive a 12.5% increase for the next four years under a $1.3 trillion omnibus spending plan agreed to by Congress.
“This is the first increase in over a decade,” said Sen. Maria Cantwell (D-Wash.), who championed the LIHTC boost. “Nearly $3 billion is a good start toward tackling the housing crisis in our cities and rural communities. The increase couldn’t come at a better time. This down payment will help us deal with the tremendous deficit we have in affordable housing.”
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Blogger Note: Images of Phoenix Mayor Greg Stanton (above) and Mesa Mayor John Giles (below right) have been inserted in this blog post to highlight the fact that have sworn publicly to support more affordable housing. . . certain groups here in Mesa have routinely opposed more affordable, innovative, and equitable housing here.
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Cantwell, who has been pushing to expand the LIHTC program for several years, cited how the recent tax reform bill harms future development of affordable housing. Although the 2017 tax legislation retained the housing credit program, several other measures in the bill are expected to significantly reduce the number of affordable homes built in the nation.
Congressional leaders reached a tentative deal on the new spending bill Wednesday night. President Donald Trump signed the bill Friday after both the Senate and House voted to approve the legislation.
"Enterprise is thrilled that the omnibus will strengthen and expand the low-income housing tax credit,” said Emily Cadik, senior director of public policy at Enterprise, in a written statement earlier in the week. “We especially want to thank Sen. Cantwell for her fierce determination to make more homes affordable to the 11 million households who struggle to keep a roof over their heads. These proposals from the Cantwell-Hatch Affordable Housing Credit Improvement Act have been enacted at a time when they could not be more urgently needed.”
In addition to an increase in credits, the spending plan allows for an average income test, enabling the 60% of the area median income ceiling to apply to the average of all apartments in a development.
The omnibus bill also increases funds for the Department of Housing and Urban Development (HUD), including public housing and HOME programs.
David M. Dworkin, president and CEO of the National Housing Conference, calls the fiscal 2018 funding bill "the most important housing legislation in many years."
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He cites the bill's inclusion of
> $1.36 billion for the HOME program
> $3.3 billion for the Community Development Block Grant program
> A 10% increase over fiscal 2017 HUD funding, totaling more than $11 billion over the Trump administration budget proposal.
> It also includes $250 million for the Community Development Financial Institutions Fund, which helps fund housing and community development projects throughout the nation.
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“I am especially appreciative that the House and Senate leadership were able to come together after very difficult negotiations to reach a bipartisan compromise. Washington works best when it is working together on building our country. It’s gratifying that reconciliation and compromise are not the lost arts of political discourse,” says Dworkin.
MORE INFORMATION > http://www.housingfinance.com/policy-legislation
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