On April 15, NLIHC submitted comments on modifying the Low Income Housing Tax Credit (LIHTC) program to the Community Development and Infrastructure Working Group of the Senate Committee on Finance. NLIHC also submitted comments on behalf of the United for Homes campaign to the Individual Income Tax Working Group of the Senate Finance Committee, calling for modification of the mortgage interest deduction in order to fund the National Housing Trust Fund (see related article).
NLIHC’s comments proposed reforming the LIHTC program to better align federal housing resources with the needs of extremely low income households who face a critical shortage of affordable rental units. Based on findings from NLIHC’s Alignment Project study, NLIHC recommended that the Committee change the federal LIHTC statute to provide for a third income targeting criterion to allow developers to better utilize cross subsidization.
The income targeting option would require that at least 40% of the units in a project be occupied by residents with incomes that average no more than 60% of the area median income (AMI), with at least 30% of the units rent-restricted and occupied by tenants with incomes at or below 30% AMI. No rent-restricted units would include households with incomes above 80% of AMI. NLIHC’s comments also recommended that properties that choose this option receive a 50% basis boost.
NLIHC’s comments to the Community Development and Infrastructure Working Group are at http://nlihc.org/sites/default/files/NLIHC-Comments_Community-Development-and-Infrastructure-Tax-Reform-Working-Group.pdf.