AFFORDABLE HOUSING FINANCE |
LIHTC Provisions Added to Build Back Better Act |
An increase in the 9% cap and reducing the bond test are included in the House plan. By Donna Kimura Key low-income housing tax credit (LIHTC) provisions were added to the House version of the Build Back Better (BBB) plan in early November after they were left out of the White House’s initial framework. The latest House package calls for increasing the 9% LIHTC allocation cap by 10% plus inflation each year from 2022 to 2024 when it will have risen to $3.97 per capita or a small state minimum of about $4.58 million. In 2025, the housing credit volume cap would fall back to $2.65 per capita or a small state minimum of $3.12 million. Among other key LIHTC provisions, the House manager’s amendment includes reducing the 50% bond financing test to 25% for five years. Many advocates were originally expecting that this change would be for four years, but they received an extra year with the bond test reduction proposed through 2026. Supporters had been emphasizing the significance of this change especially in helping redevelop aging public housing through the Rental Assistance Demonstration program, says David Gasson, partner at MG Housing Strategies and executive director of the Housing Advisory Group. While the Department of Housing and Urban Development (HUD) programs are vital, the housing credit is the piece that enables new construction, he says. There was some early hope for a quick vote on the bill, but it now appears that the House may wait for a Congressional Budget Office report on the cost of the plan before voting. That will likely lead to further negotiations about the overall size of the bill. “I’m hopeful they will get it out of the House by Thanksgiving,” Gasson says. Speaker Nancy Pelosi (D-Calif.) has indicated that she intends for a vote during the week of Nov. 15, according to a Reuters report. Housing advocates also point out that the Senate version of BBB will surely be different. The timing on the Senate side is also difficult to predict. “The wheels have to fall off and come back on several times before things like this get passed,” says Bob Moss, partner at MG Housing Strategies. At this time, the good news is that many of the big LIHTC provisions that the affordable housing industry has been seeking for years are in the House bill. The House package also calls for a permanent 50% basis boost for developments serving extremely low-income (ELI) households, with an 8% minimum set-aside for ELI properties and a 30% basis boost for properties on tribal lands. It would also make modifications related to the right of first refusal. “The proposals to increase housing credit production included in the House’s newest version of the Build Back Better legislation would yield the most significant expansion of the housing credit ever,” says Emily Cadik, executive director of the Affordable Housing Tax Credit Coalition. The addition of these provisions back into BBB after they were excluded from the previous version was thanks to support from House and Senate leadership and White House negotiators as well as advocacy from the affordable housing community and program champions in Congress, according to Cadik. “While the inclusion of these proposals points to a recognition that the housing credit is a critical part of the effort to address our nation’s affordable housing shortage, we cannot take anything for granted,” she says . .
|
_
No comments:
Post a Comment