As the country continues to grapple with an affordable housing and homelessness crisis, a bipartisan, bicameral group of U.S. Senators and Representatives today introduced legislation to increase investment in affordable housing and provide more resources and stronger protections for at-risk groups.
The Affordable Housing Credit Improvement Act of 2019 was introduced by U.S. Representatives Kenny Marchant (R, TX-24), Suzan DelBene (D, WA-01), Jackie Walorski (R, IN-02), Don Beyer (D, VA-08), and U.S. Senators Maria Cantwell (D-WA), Johnny Isakson (R-GA), Ron Wyden (D-OR), and Todd Young (R-IN).
“The Dallas-Fort Worth region saw the biggest population growth in Texas last year, with developers building non-stop to keep up with demand,” said Congressman Kenny Marchant. “Tax credits are a vital tool in ensuring that affordable housing is part of their building plans, which is why I am proud to cosponsor this legislation to expand and improve the Affordable Housing Tax Credit. Doing so will make it possible for even more families to call areas like ours ‘home.’”
From 2000 to 2017, the total number of Americans facing extreme housing unaffordability ballooned from 7 million to 10.7 million – an increase of more than 50 percent. In addition, there is a nationwide shortage of 7.4 million affordable rental homes, an increase from the 4.6 million gap in 2000.
The legislation introduced today would expand and strengthen the Affordable Housing Tax Credit (also known as the Low Income Housing Tax Credit) to produce more units of affordable housing to close this gap and better serve a number of at-risk and underserved communities.
Across the United States, the expanded Affordable Housing Tax Credit would produce roughly 1.9 million new affordable housing units over the next decade, an increase of over 550,000 more units than would be built without the legislation. The bill increases the total number of affordable housing units built by:
· Increasing the amount of credits allocated to each state by 50% over current levels, resulting in the production of more than 384,000 more affordable homes in the next 10years than would otherwise be created.
· Stabilizing the value of the 4% Affordable Housing Tax Credit – which is used for new construction that uses additional subsidies or the acquisition cost of existing buildings. This will create more certainty for ongoing and new projects and increase affordable housing production by more than 66,000 units.
· Expanding and reforming “recycling” of multifamily housing bonds, allowing states to maximize the available resources of private activity bonds by recycling multifamily bonds for affordable housing, resulting in 100,000 additional affordable housing units.
In addition to expanding the number of affordable homes built in the United States, the legislation makes a number of key reforms to strengthen the Affordable Housing Tax Credit. These reforms will:
· Create veteran-specific housing options. The legislation stipulates that the Affordable Housing Tax Credit can be used to support housing for veterans.
· Better target extremely low-income populations. The legislations increases, by 50%, the amount of credits available to developments serving extremely low-income populations or those with special needs, such as formerly homeless veterans.
· Boost affordable housing in Indian Country. The legislation classifies projects in Indian Country as Difficult to Develop Area, increasing the amount of credits available to build affordable housing in these areas. The legislation also requires states to consider the needs of their Native American communities by establishing new selection criteria for projects.
· Boost affordable housing to rural communities. The legislation gives states the ability to increase the amount of credits available to projects in rural areas.
· Protect victims of domestic violence and stalking. The legislation will bring all properties built using the Affordable Housing Tax Credit in line with Violence Against Women Act (VAWA) standards to better protect victims of domestic violence, dating violence, sexual assault, and stalking.
· Opens affordable housing properties to more low-income students. The legislation simplifies current rules to ensure non-traditional students, such as single parents, veterans, formerly homeless youth, and domestic violence survivors, have access to affordable housing properties. Previously the rule was overly complex and differed from other HUD-financed housing rules.
Since its creation 30 years ago, the Affordable Housing Tax Credit has built or rehabilitated more than 3.2 million affordable housing units, leveraging more than $190 billion in private investment to do so. During that time, the credit has been responsible for nearly 90 percent of all federally-funded affordable housing. Between 1986-2013, more than 13.3 million people lived in homes financed by the Affordable Housing Tax Credit.