Top congressional leaders are working quickly to reach a bipartisan agreement before the end of the year to expand the Child Tax Credit and revive several expired business tax incentives. If a deal is reached, the tax package could also include resources to expand and reform the Low-Income Housing Tax Credit (LIHTC). It is critical that Congress ensure that any new LIHTC resources included in a tax package serve the millions of households experiencing or at risk of homelessness – those most harmed by our nation’s housing crisis. 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 can 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 of these 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.
These reforms are included in the “Affordable Housing Credit Improvement Act” (S.1557/H.R.3238), a piece of bipartisan legislation introduced by Senators Maria Cantwell (D-WA), Todd Young (R-IN), Ron Wyden (D-OR), and Marsha Blackburn (R-TN), along with Representatives Darin LaHood (R-IL) and Suzan DelBene (D-WA).