In the final days prior to the start of the traditional August congressional recess, Democrats in the House and Senate have put the spotlight on the affordable rental housing crisis by introducing a number of new bills.
Here is a brief summary of the legislation:
- On July 19, Sen. Kamala Harris (D-Calif.) introduced the Rent Relief Tax Act (S. 3250), which would create a new, refundable tax credit for renters who pay more than 30% of their gross income on rent and utilities. The bill has four Democratic cosponsors, none of whom sit on the Senate Finance Committee.
- On July 26, the Assistant Democratic Leader in the House, Jim Clyburn of South Carolina, introduced the Restoring Tax Credits for Affordable Housing Act (H.R. 6542). This bill would increase state Low Income Housing Tax Credit (LIHTC) allocations and modify the discount rate formula used to calculate the 9% credit rate. The goal of this bill is restore the equity lost as a result of the lower corporate tax rate. H.R. 6542 has 23 Democratic cosponsors, but none of them are on the tax-writing Ways and Means Committee. Rep. Clyburn also cosponsored H.R. 1661, the Curbelo-Neal bill to strengthen the LIHTC, at the same time he introduced this bill.
- On Aug. 1, Sen. Cory Booker (D-N.J.) introduced the Housing, Opportunity, Mobility, and Equity (HOME) Act of 2018 (S. 3342), which would also create a new refundable tax credit for renters. The bill would also seek to require communities to adopt “inclusive zoning policies,” which would be of concern to NAHB. NAHB does not support federal pre-emption of local or state land use authority. S. 3342 has no cosponsors.
While none of these bills enjoy bipartisan support or even support of any Democrats on the tax writing committees, they show a growing focus among Democrats on affordable housing. It is notable that two of these three bills focus on creating a renters’ tax credit, an idea that has drawn criticism from the LA Times and the Tax Foundation, and by some estimates could cost $76 billion per year.
Unfortunately, renters’ tax credits do not address the fundamental problem driving the affordability crisis, which is lack of inventory. Nonetheless, NAHB will seek to leverage this newfound energy on affordable housing into action on H.R. 1661, the Curbelo-Neal bill, and S. 548, the companion Senate bill sponsored by Sens. Maria Cantwell (D-Wash.) and Orrin Hatch (R-Utah).
We anticipate that in the coming weeks, additional legislation will be introduced related to affordable rental housing.
For more information, contact J.P. Delmore at 800-368-5242 x8412.