icon Breaking Ground

Breaking Ground:Emily Cadik, CEO, Affordable Housing Tax Credit Coalition

11 min read

Emily Cadik is one of the most powerful lobbyists in Washington, DC advocating for the Low Income Housing Tax Credit program.

Since taking over as CEO of the Affordable Housing Tax Credit Coalition (AHTCC) in April 2018, Cadik has been at the forefront of every major effort to protect, strengthen and expand LIHTC, including the 2020 enactment of a minimum four percent Housing Credit rate, the 2018 enactment of a 12.5 percent Housing Credit allocation increase from 2018 to 2021 and efforts to implement “income averaging” protocols.

Before that, Cadik was a senior director of public policy at Enterprise Community Partners, where she led policy and advocacy related to LIHTC and other affordable housing and community development issues. While at Enterprise she served on the board of the AHTCC, chairing the Legislative Committee, co-chairing the Marketing Committee and serving on the Executive Committee.

Before joining Enterprise she was a Presidential Management Fellow at the U.S. Department of Housing and Urban Development, where she served as a program coordinator for the Moving to Work demonstration program and in the Office of Intergovernmental Affairs.

Tax Credit Advisor sat down with Cadik to discuss her top LIHTC priorities in 2023, forthcoming changes to the Community Reinvestment Act and her approaches to advocacy.

Tax Credit Advisor: At the time of this interview (November 30), Democrats control all three branches of government for a few more weeks. What are your top priorities during the Lame Duck session?

Emily Cadik: Our top priority is to restore the temporary LIHTC allocation increase of 12.5 percent that was enacted in 2018 and expired at the end of 2021. That should be a relatively straightforward request, not that anything is ever easy, but it has been routine for Congress to renew expired tax provisions. In addition to that, we are trying to get Congress to lower the 50 percent bond financing threshold to free up more private activity bond cap in the growing number of states that are over-subscribed and create efficiencies in the program. Along with other housing advocates, we have been building bipartisan support for these proposals. We looked to “Build Back Better” to get these changes made, but that bill evolved into the Inflation Reduction Act with no housing proposals, which forced us to look for other vehicles. Our last chance would be a year-end bill, and the engine for that is government funding, which expires on December 16. The first question, which affects what’s possible on the tax side, is whether Congress can come to an agreement on an omnibus spending bill, or whether they just do a simple continuing resolution to fund the government at current levels and kick it into next year. There are a lot of stars that may be aligning to do an omnibus bill. Some of the key negotiators are retiring at the end of the year, so they’d like to see a deal made with their stamp on it. But there are always contentious issues. They got a late start on negotiations, and the whole thing could fall apart and come back together multiple times before Congress adjourns. We’ve tried to position the housing credit as best as we possibly can. We had an exciting week recently when Congresswoman Suzan DelBene (D-WA), Congressman Brad Wenstrup (R-OH) and over 50 other Representatives roughly evenly split between Republicans and Democrats submitted a letter to the House leadership to take action on the aforementioned LIHTC reforms in any year-end legislation. It’s a powerful bipartisan signal, so we’re going to be doing everything possible to seize on that momentum and see if we can get something done if a spending/tax bill materializes.

TCA: Once the new Congress convenes in January, we’ll have a divided government for the next two years. Affordable housing is a bipartisan issue, but I imagine it will still be challenging to get things passed. How will this impact your political agenda?

EC: I am skeptical about the number of bills that will pass, but I am glad to be working on a program that has as much bipartisan support as LIHTC does. Unlike 2021 and 2022, when legislation could pass with Democratic-only support now everything that needs to pass in 2023 will need Republican support as well. So, to the extent there are bills passing, I think the housing credit is at least viewed favorably. What the contours of any of those bills might be is anyone’s guess at this point, but probably more limited to must-pass legislation and not much else. Because gridlock is likely, we are also thinking about what can be done on the regulatory side. This administration, especially in the last few months, has been proactive in trying to see what can be done without needing to go through Congress to support affordable housing. We saw that with the Average Income Test regulations that just came out, the deadline extensions that just came out well ahead of their expiration and the State and Local Fiscal Recovery Fund guidance that came out this summer. Now that some of these bigger items that we’ve been pursuing have been taken care of, we are starting to think about other ways we can support affordable housing through administrative action. That’s something that we and our partners in the industry are going to be thinking through over these next few weeks and months.

TCA: Potential changes to the Community Reinvestment Act loom large on the horizon and have the potential to significantly dampen demand for LIHTCs. How are you thinking about this as we move into the new year?

EC: I am far less optimistic about CRA reform than I am about the legislative prospects for the housing credit. CRA regulations have a major impact on housing credit investment, but they aren’t necessarily viewed as housing regulations. I’m concerned that the housing credit could become collateral damage in some of the broader changes that are being sought as part of CRA modernization. Eighty-five percent of the $22 billion-dollar LIHTC market comes from banks with CRA obligations. The main way they meet those CRA obligations is through the Investment Test, which is all but certainly going to be eliminated in the revised CRA rules. We’ve tried to propose other ways to incentivize housing credit investments that don’t require the Investment Test, but without something to create that same motivation some banks may not be interested in investing in the housing credit, or pricing may drop, which impacts production. Besides eliminating the Investment Test, as the proposed rule is currently drafted banks won’t be able to achieve an outstanding rating, period. So, if you used to invest in LIHTC to get your outstanding rating, and now the main thing that motivated you to check the box to meet the Investment Test is no longer there because you’re not going to hit an outstanding rating anyway, that only compounds the problem. We, and many others in the industry, weighed in and conveyed these points and tried to come up with alternatives that we believed were consistent with what regulators were trying to accomplish. But unlike when negotiations are happening on the Hill, and we have a pretty good sense of where everything is heading, with the CRA regulators, we won’t know what the final regulations look like until they’re published. If regulators don’t make a concerted effort to support housing credit investment, and they change some of the factors that have sustained it for so long, it could have a major impact on the industry.

TCA: We’ve seen unprecedented attention on affordable housing and the lack thereof. How do we harness that momentum and turn it into action? 

EC: There’s unprecedented attention on affordable housing because the rental housing crisis has gotten so much worse between the pandemic and inflation. What used to be seen as a big city problem is now affecting the entire country. We have gotten a lot of new supporters in our efforts, but the question remains will Congress pass legislation to address the problem? The two priorities I mentioned earlier, if enacted, would create 1.5 million more affordable homes than otherwise possible over the next decade. We’re hoping that will provide the compelling reason that for a relatively reasonable cost compared to some of the things our government spends money on, we could make a big dent in the affordable housing crisis. There are so many other factors that influence the parameters of these tax deals. The appetite for LIHTC provisions could be affected by what they agree to on the Child Tax Credit, for example, which is a top priority in tax negotiations but not something that housing advocates have any influence over. The interest and support are there for the housing credit as a proven solution. It’s just a question of when Congress passes so few bills, what rises to that short list of what actually gets done?

TCA: What attracted you to a career in public policy and affordable housing?

EC: I was drawn to the ability to have an impact. My first role in affordable housing was at HUD, where I had the opportunity to visit public housing agencies all over the country. On one of the early site visits, the people running one of the resident services programs put together a binder where they asked all of the people living there and getting the services to write down what having a home in that development meant to them. It was so moving to read these stories and once you get to talk to residents, you get to hear more of that. It was an early experience that really stuck with me. People say it must be so hard being in DC with everything so polarized. From the outside, it looks discouraging. We actually do get to work on a bipartisan issue. We work with members of Congress and staff on both sides of the aisle, who seem to genuinely like each other. We get to see what a lot of people don’t. When everyone’s out on TV sticking to party messages, a lot is going on behind the scenes that is constructive, bipartisan and productive. The ability to influence legislation, to be part of changing policy, from the initial policy development, to identifying a problem, developing the solution with experts, finding members of Congress who are willing to carry it, building the support for it, texting back and forth with them the night before it goes to the House floor, trying to make sure you have the language right, and it does what you thought it was going to do, and then getting to see it signed into law, to be part of something that has such a big impact is a real privilege to be able to influence the process and something I definitely don’t take for granted.

TCA: Having run the AHTCC and previously the ACTION Campaign, can you describe your approach to big-tent advocacy?

EC: I love this question. It comes down to two main things. You must make advocacy as easy as possible. Putting in a paragraph about what AHTCC’s goals are and telling people to call their Member of Congress is too high of a barrier for some people when they have day jobs and don’t really have time to think about composing an email. Provide templates. Provide contact information. Explain what we’re asking, why we’re asking and whom to ask. Those things take the guesswork out for people and have been one of the most important ways to get people to do what we’re asking. The other piece involves establishing credibility. When we make a request for everyone to call their Members, they will do it, because they know we’re not going to ask them unless it’s serious. That’s what really gets people motivated. The other piece is, of course, building consensus and singing from the same playbook. We’ve been told time and time again by Members of Congress and staff that we all need to figure out what the ask is and then come back. If too many groups ask for too many different things, it’s too easy to give the Member an excuse to say, ‘Well, we can see there’s an affordable housing crisis, but no one knows how we should solve it. So, we’re just going to go do something on energy credits, for example.’ Having the cohesiveness of asking for the same thing, identifying the solution and gathering support has been really powerful.

Darryl Hicks is vice president, communications for the National Reverse Mortgage Lenders Association and a 24-year veteran of associations managed by Dworbell, Inc., the management company of NH&RA.