Senator Proposes Ambitious Housing Bill with LIHTC Provisions
Senate Finance Committee Chairman Ron Wyden (D-OR) recently unveiled the Decent, Affordable, Safe Housing for All Act (DASH Act). The legislation seeks to make a generational investment to house all people experiencing homelessness, tackle the housing affordability crisis, and expand homeownership opportunities for young people by creating a new down payment tax credit for first-time homebuyers.
The context: The U.S. is experiencing a shortage of nearly 8 million units of affordable and available units for the lowest-income renters, according to estimates cited by Senator Wyden’s office. Up to 15 million households spend over 50 percent of their take-home pay on rent each month. And at least 550,000 Americans were homeless on any given night last year.
What you need to know: The DASH Act includes several provisions from the Affordable Housing Credit Improvement Act (AHCIA). These LIHTC provisions are projected to produce nearly 1 million new affordable housing units over the next 10 years.
Chairman Wyden intends to use this proposal to inform development of the housing components of an infrastructure reconciliation bill. Here are the AHCIA provisions included in the DASH Act, with some modifications:
- Lowering the 50 percent bond financing threshold test to 25 percent for four years
- Increasing the annual Housing Credit allocation by 50 percent, phased in over two years, and permanently extending the 12.5 percent temporary allocation increase that is currently set to expire at the end of this year
- Providing a 50 percent basis boost for developments serving extremely low-income (ELI) households and providing an additional 10 percent allocation increase per state to be used as a set-aside for serving ELI households
- Providing 30 percent basis boosts for developments in rural and Native communities if needed for financial feasibility
- Allowing state allocating agencies to provide a 30 percent basis for properties financed with 4 percent credits and Housing Bonds if needed for financial feasibility
- Prohibit local approval and contribution requirements that can prevent developments from moving forward due to Not in My Backyard (NIMBY) opposition