March 13, 2018
Why Congress Must Act NOW to Restore the Value of the Housing Credit

The U.S. House of Representatives is negotiating final changes to the March 23 rd 2018-19 spending bill as I write, meaning that the last chance to affect the contents of the House proposal, including fixes to problems created by the GOP Tax Bill, is likely TODAY. While the Senate will have a lot to say about what the final spending bill looks like, fixing the House bill is the best way to ensure that Congress fixes a huge problem it created with the Housing Credit program when it passed the GOP Tax Bill in December.
 
Last week the California Housing Partnership published   new information on how the GOP Tax Bill has decimated the Low Income Housing Tax Credit market in California to the tune of $1.4 billion of missing equity in 2017 alone. Production is likely to decrease by at least 75,000 affordable homes over the next ten years unless Congress includes the provisions of the Affordable Housing Tax Credit Improvement Act (S. 548), authored by Senators Cantwell (D-WA) and Hatch (R-Utah), in the spending bill Congress must pass by March 23rd.
 
CHPC's recent analysis shows that California's Housing Credit production shrank by 45% last year in large part due to the Housing Credit market turmoil and price reductions in advance of the GOP Tax Bill becoming final. The Bay Area and Los Angeles were even harder hit with reductions of 50% and 54% respectively.
 
While we hope that Housing Credit investment and production will increase somewhat in 2018, there can be no doubt that the GOP Tax Bill has hugely and adversely affected California's ability to address our affordable housing crisis well beyond the predicted 15% drop in value. Which is why I am now estimating a larger long-term drop of 7,000 low-income rental homes per year or 75,000 over ten years when combined with the effects of the new chained CPI provision.
 
For this reason, it is critical that California members of Congress do everything in their power to ensure that as many of the provisions as possible from S. 548 and its slightly less favorable House counterpart, H.R. 1661, are included in the March 23 omnibus spending bill for 2018-19. The House is trying to finalize TODAY and vote on the bill this Friday in order to give the Senate and President a week to act.
 
Here are the highlights of what S. 548 would do to help improve/fix the Housing Credit:
  1. Increase 9% Housing Credit allocation to states by 50%
  2. Allow income mixing up to 80% AMI in return for maintaining average affordability
  3. Fix value of 4% credit, boosting its value by approximately 25%
  4. Allow states to give a 30% boost to 4% Housing Credit deals
The House version, H.R. 1661, omits the 50% increase in the 9% Housing Credit allocations.
 
Contact Congress NOW to Demand Inclusion of S. 548/H.R. 1661 in the March 23 Spending Bill.
 
Here is what our colleagues running the Rental Housing ACTION Coalition would like us to do:  


 

1) Ask all Republican co-sponsors of H.R. 1661 to urge Speaker Ryan and Chairman Brady to include the provisions of H.R. 1661 in the tax package that could move with the omnibus. In California, these are:

2) Ask all House Democratic co-sponsors of H.R. 1661 to urge Minority Leader Nancy Pelosi to make sure including the provisions of H.R. 1661 is a Democratic priority in negotiations with Speaker Ryan and the Senate.

3) Senate Ask: Please ask Senator Feinstein, who is waiting to be added as a co-sponsor to S. 548, and urge her to share her support with Minority Leader Senator Schumer by emailing her housing staffer, Brent Palmer (Brent_Palmer@feinstein.senate.gov), and her tax lead, Ellen Baron (ellen_baron@feinstein.senate.gov), and asking that they contact Schumer's office on her behalf. Please also make the same request of Senator Harris' tax lead, Yasmin Rigney, Yasmin.Rigney@harris.senate.gov.
 
To maximize the effectiveness of your emails, I suggest you download the fact sheet documenting the benefits that the Housing Credit has delivered to each Senator and Representative's district by clicking here and selecting their names individually.