Advocates expect a bipartisan tax bill to be brought to the U.S. House of Representatives as early as tomorrow (Tuesday, January 30), though key reforms to the Low-Income Housing Tax Credit (LIHTC) have been left out of the bill. After the bill passed out of the House Committee on Ways and Means (see Memo, 1/22), NLIHC released a statement encouraging advocates to continue urging their members of Congress to include LIHTC reforms in any upcoming tax legislation.
Senator Ron Wyden (D-OR), chair of the U.S. Senate Committee on Finance, and Representative Jason Smith (R-MO), chair of the U.S. House of Representatives Committee on Ways and Means, created the framework for the bipartisan tax bill, the “Tax Relief for American Families and Workers Act of 2024.” The bill includes provisions to enhance the Child Tax Credit, expand business tax credits for research and development, support communities impacted by disasters with small business tax credits, expand the Low-Income Housing Tax Credit (LIHTC), and end a pandemic-era employee retention tax credit. In the case of LIHTC, the tax bill would restore a temporary 12.5% increase and support the use of private activity bonds to finance affordable housing.
However, while the legislation expands LIHTC, it fails to include key reforms to ensure homes built with LIHTC are affordable to the lowest income and most marginalized households, including those experiencing homelessness. NLIHC has advocated for key reforms to be included in any LIHTC expansion: a 20% set aside of tax credits for extremely low-income households or those experiencing homelessness; and the designation of both rural and Tribal communities as “difficult development areas” (DDAs), which would boost housing development.
LIHTC is the nation’s primary source of financing for the construction and preservation of affordable housing, but on its own, the tax credit can rarely build or preserve homes affordable to households with the greatest and clearest needs.
Take Action!
It is not too late to urge your members of Congress to include LIHTC reforms in any upcoming tax legislation. While the tax bill has passed out of the House committee, it remains yet to pass in the full House or Senate. Take action today:
- Contact your members of Congress and urge them to include key reforms to the Low-Income Housing Tax Credit (LIHTC) in any tax legislation so the nation’s largest source of federal financing for affordable housing can better serve rural and tribal areas, as well as those most at risk of homelessness. These bipartisan reforms – included in the “Affordable Housing Credit Improvement Act,” endorsed by over 200 members of Congress – would:
- Expand the Extremely Low-Income (ELI) Basis Boost for housing developments that set aside at least 20% of units for households with extremely low incomes or those experiencing homelessness.
- Designate Tribal and rural communities as “Difficult Development Areas” (DDAs), which would make it more financially feasible for developers to build affordable homes in these areas.
- Additionally, any federal investment in “middle-income housing,” such as that included in the “DASH Act” (S.680/H.R.6970), would be a wasteful and misguided use of federal funds. To address housing costs for middle-income households, Congress should pass legislation incentivizing or requiring local and state governments to address restrictive zoning and land use policies that prevent the private sector from building homes and drive up the costs for all renters. Read more about the Middle-Income Tax Credit here.
Read the “Tax Relief for American Families and Workers Act of 2024” framework announcement here.
Read NLIHC’s statement on the tax bill here.