Congressional leaders are working quickly to reach an agreement before the beginning of the 2024 tax filing season on a tax package that includes an extension of the Child Tax Credit and several business tax incentives. NLIHC strongly supports an extension of the Child Tax Credit and also urges Congress to reform the Low-Income Housing Tax Credit (LIHTC) in a tax package. Housing advocates have a narrow window to voice their priorities – take action today!
If reached, a tax deal could also include resources to expand and reform LIHTC. Congress must ensure that any new LIHTC resources serve the millions of households experiencing or at risk of homelessness – those most harmed by our nation’s housing crisis. LIHTC is the largest source of federal funding for the creation of affordable housing, but critical reforms are needed for the program to reach those most in need.
Make your voice heard! Tell Congress that any expansion of LIHTC must be paired with key bipartisan reforms to better serve America’s lowest-income and most marginalized households and renters living in rural and Tribal communities.
Take Action!
Contact your senators and representatives – including those who serve on the Senate Finance Committee or House Ways & Means Committee – to urge them to ensure that any new LIHTC resources reach households experiencing or at risk of homelessness.
Ask your members of Congress to pair any expansion of LIHTC with key bipartisan reforms, including:
- Expanding the basis boost – known as the Extremely Low-Income (ELI) Basis Boost – for housing developments that set aside at least 20% of units for households with extremely low incomes or those experiencing homelessness.
- Designating Tribal and rural communities as “Difficult to Develop Areas” (DDAs), which would make it more financially feasible for developers to build affordable homes in these areas.
Background
Across the nation, homelessness is increasing in many communities, as more of America’s lowest-income and most marginalized households struggle to afford a place to call home. On any given night, more than half a million people experience homelessness, and millions more are at risk.
The primary underlying cause of homelessness is the severe shortage of homes affordable to households with the lowest incomes. Nationally, there’s a shortage of 7.3 million homes affordable to the lowest-income households, meaning that there are fewer than four affordable and available homes for every 10 extremely low-income renter households. No state or city has enough housing affordable to these households.
While LIHTC is an important source of federal funding for affordable housing, it is rarely sufficient on its own to build or preserve homes affordable to households with the lowest incomes – those with the greatest, clearest needs. The majority (58%) of extremely low-income renters living in LIHTC developments who do not also receive rental assistance are severely cost-burdened, paying more than half their incomes on rent.
Because there are so few opportunities in 2023 and 2024 to expand housing resources at the federal level, it is critical that Congress ensure that these new resources are spent as effectively as possible to address the underlying causes of the housing crisis and to help those with the greatest needs.
Any expansion of LIHTC must be paired with key bipartisan reforms, including:
- Expanding the ELI basis boost for housing developments that set aside at least 20% of units for households with extremely low incomes or those experiencing homelessness. This reform would allow LIHTC to be used to better target the lowest-income renters by making it possible to offer rents that are affordable to them and to facilitate the development of more affordable housing for populations with special needs, such as formerly homeless individuals and people with disabilities.
- Designating Tribal and rural communities as “Difficult to Develop Areas” (DDAs), which would make it more financially feasible for developers to build affordable homes in these areas. Rural and tribal communities experience higher poverty rates and lower incomes and often lack access to affordable capital. Tribal nations have the most severe housing needs in the U.S., with high rates of overcrowding, unreliable plumbing and heat infrastructure, and unique development issues.
All these reforms are included in a piece of bipartisan legislation, the “Affordable Housing Credit Improvement Act” (S.1557/H.R.3238), introduced in the Senate by Senators Maria Cantwell (D-WA), Todd Young (R-IN), Ron Wyden (D-OR), and Marsha Blackburn (R-TN) and in the House by Representatives Darin LaHood (R-IL) and Suzan DelBene (D-WA).