Representative Yvette Clarke (D-NY) introduced the “Affordable Housing and Area Median Income Fairness Act of 2019” (H.R.4984) on November 5. Co-sponsors include Representatives Grace Meng (D-NY), Danny Davis (D-IL), José Serrano (D-NY), Eleanor Holmes Norton (D-DC), Jerry Nadler (D-NY), and Adriano Espaillat (D-NY). If enacted, the bill would help preserve the affordability of housing financed with the Low Income Housing Tax Credit (LIHTC) by barring jurisdictions from using a high housing cost adjustment to calculate area median income (AMI) unless the jurisdiction receives HUD approval. The bill would also require a study to determine alternate methods of calculating AMI. In addition, the bill would authorize $2.5 billion annually over ten years for each of the national Housing Trust Fund, the HOME Investments Partnership program, and the Community Development Block Grant program.
The bill is aimed at addressing concerns residents of LIHTC homes have raised about the rising cost of rent. LIHTC properties use AMI to determine whether a household meets income-eligibility limits as well as to determine the amount of rent a household pays. LIHTC-assisted units are reserved for households with incomes less than 50% or 60% of AMI, depending on the developer’s choice when seeking LIHTC financing. The rent residents pay is based on a fixed amount equal to 30% x 50% of AMI or 30% x 60% of AMI, not on 30% of a household’s actual income. High housing cost adjustments are typically applied in areas where the cost of housing is significantly high compared to median income. Application of a high housing cost adjustment results in higher rent payments for assisted households. Restricting the use of high housing cost adjustments in determining AMI for LIHTC properties would likely result in greater affordability for lower-income households.
More about the bill is at: https://bit.ly/2Q6CxPc
More about the LIHTC program is on page 5-14 of NLIHC’s 2019 Advocates’ Guide.