Senator Cantwell Leads LIHTC Expansion Campaign

4 min read

Calls for 50% Increase in allocation authority

On March 24, Senator Maria Cantwell of Washington launched a national effort to increase affordable housing tax credits by issuing a report entitled, “Addressing the Challenges of Affordable Housing and Homelessness: Housing Tax Credit.” The report, which says there are 3.9 million Americans searching for low income housing, calls for an increase in annual Low Income Housing Credit allocation authority by 50 percent over five years, creating and preserving an estimated total of 400,000 additional affordable homes over the next decade.

Cantwell is expected to issue a bill that includes numerous other provisions to expand the impact of the LIHTC; e.g. to allow “income averaging” in Housing Credit developments, which means they could serve households up to 80 percent of area median income so long as the average income in the property remains at or below 60 percent of the area median. This would help promote income diversity, enable developments to more deeply target lower-income households, provide local workforce housing and make Housing Credit developments more viable in rural and other areas where it is more difficult to target households at the income levels needed for feasibility.

Cantwell’s proposal, says a spokesperson, is also expected “to include a minimum four percent Housing Credit rate for the acquisition of affordable housing, while also establishing a minimum four percent rate for Housing Bond-generated credits. It would also allow up to a 50 percent basis boost for properties targeting extremely low-income (ELI) and homeless households. Currently, state allocating agencies can only award up to a 30 percent basis boost for properties if needed for financial feasibility.”

Cantwell, who according to a press spokesperson is “working closely with Pat Roberts (R-Kansas),” is the public face of ACTION (“A Call To Invest Our Neighborhoods”), which describes itself as a “broad cross-section of Housing Credit stakeholder organizations” ranging from public housing authorities to profit-making developers. She and Roberts, along with ACTION, worked closely together in 2015 on legislation that included in the tax extenders bill provisions making permanent the minimum nine percent Housing Credit rate. This success was due in large part to the strong bipartisan support, with 86 co-sponsors in the House and 29 in the Senate.

More than 1,300 organizations and businesses have joined ACTION in urging Congress to expand the LIHTC. Their report and companion material document that virtually every congressional district in every section of the country is home to significant numbers of families and communities that continue to benefit from LIHTCs—including jobs and economic activity that extend far beyond the realm of “affordable housing.” According to the National Council of State Housing Agencies, in 2013 (the most recent year for which data are available) developers requested more than $2.4 billion in such credits—more than three times the available authority. Demand has been growing, with developers requesting nearly a half-billion dollars more in credit allocations in 2013 than in 2012.

Developers are eager to build, but can’t get the necessary tax credits.

“The coalition supporting this bill is huge,” says Washington DC-based Emily Cadik, Director, Public Policy Enterprise Community Partners, Inc., a leader of the ACTION effort. “We expect other elected officials and public figures will join as people across the country recognize the importance of this campaign to expand the Housing Credit, which builds on the momentum of our success last year with making the minimum nine percent rate permanent. The power of having the affordable housing industry unified was certainly evident in our recent success in the last Congress with the minimum nine percent rate, when the Housing Credit was one of only three corporate tax expenditures preserved in House Ways and Means Committee Chairman Dave Camp’s

[R-MI] draft tax reform legislation. We are more successful speaking together with one voice to educate Congress about why the Housing Credit is a proven tool to help meet this need. Our large and growing list of supporters shows members of Congress that there is support and need for the Housing Credit in every state.”