Congress May Consider Extending Minimum LIHTC Rate Floor
When Congress returns to session on Sept. 9, its legislative priorities for the remainder of the calendar year include the debt ceiling extension, federal appropriations measures, and potential tax reform.
Somewhere on the list of legislative priorities is S.1442, a bill introduced by a bipartisan group of 20 senators led by Sen. Maria Cantwell. The current 9 percent LIHTC rate floor was established in the Housing and Economic Recovery Act (HERA) of 2008. It was extended for one year in the American Taxpayer Relief Act of 2012 and expires for developments that don’t receive LIHTC allocations before Jan. 1, 2014. Without an extension of this floor, many planned affordable housing developments will be financially infeasible. In addition, a fixed-rate floor would simplify state administration of the LIHTC, and provide greater stability and predictability for LIHTC property developers and investors.
S.1442 seeks to establish a fixed-rate floor for 4 percent acquisition LIHTCs. In a statement about the bill’s introduction, Sen. Cantwell said, “This bill supports a proven job creating program that means 95,000 jobs a year across the country. The Low Income Housing Tax Credit is a win-win for our communities: It leverages private capital to invest in new jobs and new housing in our communities. This legislation will improve the tax credit for years to come.” The bill is similar to legislation that Sen. Cantwell and former Sen. Olympia Snowe introduced during the last Congress that failed to pass before the end of the session. S. 1442 has been referred to the Senate Finance Committee.