California Treasurer Highlights House Tax Plan’s Devastating Impact on Low-Income Housing
In a letter sent to the California Congressional delegation, California State Treasurer John Chiang urged the delegation to preserve funding for LIHTC and the Private Activity Bond programs. He pointed out the vital role these programs play in building and preserving affordable housing throughout the nation, but especially in California as Californians struggle “with a housing crisis that is quickly metastasizing into a humanitarian and public health catastrophe.”
According to Chiang, California accounts for one-fifth of the nation’s homeless, but one-in-three renters commit more than half of their wages to rent. With such a large portion of household income devoted to housing, Californians are struggling to cover food, medical, and childcare expenses. And the elimination of the housing bond program would be especially problematic for a housing shortage that already stands at one-and-a-half million units and is growing by an alarming 60,000 units each year.
“California is the largest beneficiary of the 4 percent housing credit and tax exempt private activity bonds in the country. In 2016, affordable housing projects in California received $2.2 billion worth of 4 percent housing credits and the state deployed more than $6 billion of private activity tax exempt bond authority for multifamily and single housing. These two funding sources created or preserved more than 20,600 affordable homes in 2016, of which 19,275 homes were for households earning 60 percent or less of Area Median Income,” stated Chiang.
In the letter, he also urged the lawmakers to support of the Tiberi-Neal Bill (H.R. 1661), a bill that strengthens the LIHTC program. Additionally, he urges inclusion in the revised Tax Cuts and Jobs Act the 50 percent increase in the 9 percent credit that is contained in the Cantwell-Hatch Bill (S. 548).
State Treasurer John Chiang also released detailed data showing that affordable housing in California’s Republican Congressional districts would be among major casualties of the House tax plan. State Treasurer’s Office data shows that California’s 14 Republican-held districts from 2013 to 2017 benefited by almost $1.5 billion from the bond program and over $689 million from the tax credits, impacting 101 projects and accounting for more than 9,400 low-income housing units. Six of the seven Republican districts in California, targeted by Democrats in 2018, will be among those hardest hit if the program cuts stand.
In addition, the state’s most important veterans’ multifamily housing program heavily depends on the bond funding and tax credits. Therefore, their elimination would eviscerate a program that has put a roof over the heads of thousands of homeless or near-homeless veterans. According to Chiang, after hard-fought success in Sacramento this year to enact landmark housing policies, H.R.1 would represent a major step backward for affordable housing in the state and it would gut the impact of the $4 billion bond measure now on California’s 2018 ballot.