CHC's Industry Insight
A Note from our Executive Director

This month, President Trump released a "budget blueprint" that calls for more than $6 billion in cuts to Housing and Urban Development (HUD) programs - a massive rollback of federal investment in home affordability.  If it feels like we've been here before, consider that 20 years ago, the affordable housing community and the people and families we serve were grappling with a 20% budget cut to HUD made under then-President Clinton and a Republican Congress.  

Last week, CHC members met with our California Congressional delegation to outline what these cuts would mean in Golden State communities at a time when Californians are facing record high rental costs. 

When we talked to CHC's founding members at the start of our 20th Anniversary year, we heard universally that bringing the "big tent" perspective of the housing community together and sending a unified message to Washington was a crucial role they envisioned for CHC.  We also heard that the opportunity CHC provides to be directly engaged in policy issues is one of the reasons CHC membership has proven to be a rewarding experience going on three decades.

At the state level, CHC members are active in educating policymakers about the affordability crisis facing Californians and the opportunities for California to turn around the state's backwards and broken housing policies. Abode Communities took part in an Assembly Housing Committee hearing in Los Angeles last Friday, emphasizing that state leadership is even more crucial when proposed federal tax law changes would widen the funding gap that has stymied affordable developments.

As founding member Michael Costa says, the education CHC provides to lawmakers makes a significant difference for our industry: " Three to four years after CHC started there was hardly a Congressperson or Senator who didn't know who CHC was.... We've been wildly successful." 

With twenty years of advocacy under our belt and with members' generous contributions and unparalleled expertise in financing, building and operating affordable developments, CHC will continue to be California's leading voice for investment and policy that strengthen communities and uplift families.

  Sincerely,
    





  Ray Pearl 
  CHC Executive Director 
In Case You Missed It...

  • CHC co-sponsored AB 71 (Chiu)The Bring California Home Act, would increase the state Low Income Housing Tax Credit Program by approximately $300 million annually. It passed 5-2 in the Assembly Housing and Community Development Committee March 8 and moves on to the Assembly Committee on Revenue and Tax.
  • CHC Co-Sponsored  SB 2 (Atkins), The Building Homes and Jobs ActSB 2, would create a permanent source of funding for affordable homes. It passed 5-2 in the Senate Governance and Finance Committee on March 15 and moves on to the Assembly Committee on Appropriations.
  • Senators Orrin Hatch (R-UT) and Maria Cantwell (D-WA) introduced S. 548 - Affordable Housing Credit Improvement Act of 2017 
Federal Legislative Update from David Gasson, Boston Capital

As CHC members who recently visited Washington, DC can tell you, the atmosphere on Capitol Hill is frenetic.  What was supposed to be an orderly process to address the key campaign promises made by President Trump and congressional Republicans has not so subtly come off the rails.  With the turmoil surrounding repealing and replacing the Affordable Care Act (ACA) in full display, one might think the entire legislative agenda is at risk.  But let us not get ahead of ourselves -- tax reform remains a priority for both Republicans and Democrats.  And while the ACA debate has dominated the recent news cycles, work on the tax code overhaul has continued with the Administration becoming more engaged in the reform conversations.

We still expect the Ways and Means Committee to reveal the statutory language and details of the House Republican tax reform blueprint released last year.  The robust debate surrounding the proposed Border Adjustment Tax (BAT), a key component of the blueprint, continues to escalate.  While the Trump Administration has yet to show its hand on this provision, we are beginning to see signals where the Administration may differ with the House blueprint.  Specifically, Treasury Secretary Steven Mnuchin recently indicated that President Trump believes carried interest should be taxed as ordinary income and may not support eliminating the deduction of corporate interest.  This is just the beginning.  As more of the House proposal comes to light, the debate will liven -- so get ready for a fun ride.

As for the LIHTC, we continue to have discussions with the House Ways and Means and Senate Finance Committees, the Joint Committee on Taxation, and recently, key advisors on the National Economic Council (NEC) and the Domestic Policy Council in the White House.  We are happy to report that these conversations have gone well, and the positive comments about the LIHTC conveyed by senior NEC staff were encouraging.  But we still have work to do.  Nothing is certain until the proposals are made public, hearings are held, tax reform is voted on in the House and Senate and signed by the President.  So the work of educating Members of Congress is ongoing.  It is worth noting the quote from the communications staff of the House Ways and Means Committee in a March 21st Wall Street Journal article entitled,  Tax Overhaul Threatens Affordable Housing Deals:

"Ways and Means Republicans believe the low-income housing tax credit is important and they are working through how this credit will fit in our next system."

There is more good news for the LIHTC with the recent introduction in the Senate and House of the Affordable Housing Credit Improvement Act of 2017.  Key provisions in the Senate version of the bill,  S. 548, include a 50% LIHTC cap increase, a permanent minimum 4% floor and a provision that allows properties to rent up to 80% of AMI as long as the property itself averages 60% AMI. The House version of the bill,  H.R. 1661, does not include the 50% cap increase and the provision eliminating the basis reduction for housing credit projects that claim certain energy efficiency tax incentives is more narrowly crafted in the House bill. 

It is our hope that these bills will be included as part of the tax reform discussions. Our job now is to secure House and Senate cosponsors for the two bills, and we encourage you to continue to engage members of the California delegation and ask them to sign onto the legislation.

CHC in DC 2017  

On March 21 and 22, a delegation of CHC Board-members traveled to Washington DC to advocate for important federal funding for affordable housing, including THUD funding, and S. 548 & H.R. 1661 (The Affordable Housing Credit Improvement Act of 2017). 

CHC participated in 22 scheduled meetings with:
  • The offices of both CA Senators
  • The offices of 17 California Members of the House of Representatives
  • Staff from House Ways & Means Committee
  • Staff from House Appropriations - THUD Subcommittee
  • Staff from Senate Finance Committee   

A special thanks to all CHC Members who were able to join us in DC! 
Affordable Housing in the News

In Los Angeles earlier this month, we saw voters show their electoral support for affordable housing by passing Measure H (the 1/4 cent sales tax increase to pay for programs to assist the homeless), and defeating Measure S (slow-growth measure that would have imposed a two-year moratorium on developments).  California Democrats Decry Trump Budget's Housing Cuts, "This is a housing crisis that preceded Donald Trump, but it is about to be exacerbated by our president," said Assemblyman David Chiu, D-San Francisco at a news conference. In the Sacramento Bee, t he father of one of 36 people killed in the massive Oakland warehouse fire in December urged California lawmakers to think of the disaster as a housing problem and create more affordable spaces for artists to live, work and perform in communities where they are increasingly being displaced or forced underground.

Additionally, we would like to thank the following t he following organizations for their support during our 20th year of bringing together private, non-profit & public sectors in a non-partisan effort to enhance the delivery of affordable housing in CA:

Is your CHC membership current? If you would like to join CHC or have questions on your membership, please contact Nancy Martin.  

STAY CONNECTED:
CHC is a non-partisan advocate for the production and preservation of housing affordable to low- and moderate-income Californians. We represent the development, building, financial, and public sectors united in their goal that every Californian has a safe, affordable place to call home.