Senators Introduce More Legislation Amending LIHTC
Senate Finance Committee member Maria Cantwell (D-WA) and Senate Finance Committee Chairman Orrin Hatch (R-UT) recently introduced legislation (S.3237), which adds upon an earlier bill they proposed to increase the LIHTC program’s tax credit authority by 50 percent and create a 4 percent credit rate floor for acquisition and bond-financed projects. Senate Finance Committee Ranking Member Ron Wyden (D-OR) also joined as an original co-sponsor.
The bill adds more provisions to make the program more streamlined and flexible. Senators Cantwell and Hatch are continuing to seek co-sponsors for S. 2962, which currently has eight bipartisan co-sponsors, while beginning to make the case for the following additional reforms.
S. 3237 includes all of the provisions from S. 2962, which would:
- Expand the annual Housing Credit allocation by 50 percent. This would make a meaningful step towards addressing our nation’s vast and growing affordable housing needs by enabling the creation or preservation of up to 400,000 new affordable homes over the next decade.
- Make affordable housing financing more predictable and feasible by creating a permanent minimum 4 percent Housing Credit rate for acquisition and for Housing Bond-financed properties.
- Permit income averaging within Housing Credit properties in order to preserve rigorous targeting while providing more flexibility and responsiveness to local needs.
S. 3237 also adds programmatic modifications intended to streamline and strengthen the program by:
- Offering an incentive for projects that target homeless or extremely low-income families. Such projects would be eligible to receive a 50 percent credit boost, allowing them to remain financially feasible while serving the neediest populations.
- Providing a purchase option to allow nonprofit organizations and state and local governments to acquire LIHTC properties when the current 15-year compliance period expires. This will help keep LIHTC properties affordable for future generations.
- Requiring that states consider the needs of Native Americans when allocating tax credits and making projects serving Native American communities eligible for an additional 30 percent credit boost, if necessary for their financial feasibility.
- Standardizing tenant income limit rules for projects in rural areas to improve LIHTC’s ability to serve rural communities.