Senators Maria Cantwell (D-WA) and Orrin Hatch (R-UT) introduced the “Affordable Housing Credit Improvement Act of 2016” on July 14. This legislation includes comprehensive reforms to the Low Income Housing Tax Credit (LIHTC) to enable it to better serve extremely low-income and homeless families and rural and Native American communities. The bill is co-sponsored by Senate Finance Committee Ranking Member Ron Wyden (D-OR).
In May, Senators Cantwell and Hatch introduced S. 2962 (see Memo, 5/23), which would expand LIHTC by 50 percent over five years, allow income-averaging at LIHTC properties, and make permanent the 4% LIHTC rate for the acquisition of existing buildings or for projects financed with tax-exempt bonds or with other federal funds.
This new, comprehensive bill includes the same provisions from S. 2962 and adds several additional measures for which NLIHC advocated to ensure that LIHTC is more deeply targeted, reaches underserved communities, and provides for long-term affordability. The new provisions include:
- Homelessness and Extremely Low-Income Families: An incentive for projects that target homeless or extremely low-income families. Such projects would be eligible to receive a 50% credit boost, allowing them to remain financially feasible while serving the neediest populations.
- Preservation of Affordable Housing: A purchase option to allow nonprofit organizations and state and local governments to acquire LIHTC properties when the current 15-year compliance period expires. This will help keep LIHTC properties affordable for future generations.
- Native American Housing: A requirement that states consider the needs of Native Americans when allocating tax credits and a provision that provides projects serving Native American communities eligibility for an additional 30% credit boost, if necessary for their financial feasibility.
- Rural Project Support: A standardization of tenant income limit rules for projects in rural areas to improve LIHTC’s ability to serve rural communities.
See Senator Cantwell’s press release at: http://bit.ly/29W7x1D
See NLIHC’s statement on the bill: http://nlihc.org/press/releases/6973