NAHB today called on Congress to pass the Affordable Housing Credit Improvements Act of 2017 (S. 548), legislation that would promote the construction of sorely needed rental apartments and help alleviate the nation’s affordable housing crisis.
Testifying before the Senate Finance Committee, NAHB Chairman Granger MacDonald told lawmakers that it is essential to increase the resources supporting housing production in order to meet the growing need for affordable rental housing.
“S. 548, a bipartisan bill championed by Sens. Maria Cantwell (D-Wash.) and Orrin Hatch (R-Utah), takes a significant and needed step to boosting supply by increasing Low Income Housing Tax Credit(LIHTC) allocations by 50%,” said MacDonald. “Enacting this bill is expected to result in an additional 400,000 LIHTC units over the next 10 years. NAHB estimates that added construction would increase federal tax revenue by $11.6 billion and state and local revenues by $5.6 billion.”
The number of renter households considered “severely cost burdened,” meaning they spend more than half of their monthly income on rent, is at an all-time high of 11.4 million, according to the Harvard University Joint Center for Housing Studies. In starker terms, that translates to more than one in four of all renters in the U.S.
“Fees, regulatory compliance, modern building and energy codes, building materials, land and labor costs determine whether a project is financially viable,” said MacDonald. “If we want to provide affordable rental housing for lower-income households, we cannot do so without a subsidy.”
This is why the LIHTC, a unique private-public partnership, is such an indispensable program. Since its inception, the program has produced and financed more than 2.9 million affordable apartments for low-income families, seniors and individuals with special needs.
Moreover, the tax credit is an important job creator, generating approximately $7.1 billion in economic income and roughly 95,000 jobs per year across many industries.
The Affordable Housing Credit Improvements Act would further promote the construction of affordable housing by making permanent the 4% credit rate for acquisition and bond-financed projects, which would provide more certainty and flexibility in financing these properties.
In addition, the legislation would allow energy tax incentives to be used in combination with LIHTCs and help combat local opposition to affordable housing projects by prohibiting local approval and contribution requirements.
“The nation lacks enough affordable housing for hard-working families,” said MacDonald. “The only effective long-term solution is to increase supply. Passing this bipartisan legislation would greatly enhance our ability to meet the growing demand for more affordable rental units.”
For additional information about the LIHTC, contact J.P. Delmore at 800-368-5242 x8412.