The U.S. Senate Committee on Finance held a hearing, “The Role of Tax Incentives in Affordable Housing,” on July 20. Senators and witnesses in the hearing discussed the impact of tax incentives such as the Low-Income Housing Tax Credit (LIHTC), the primary source of financing for the construction and preservation of affordable housing. Witnesses included Andrea Bell (Oregon Housing and Community Services), Jerry Konter (National Association of Homebuilders), Lee E. Ohanian (Hoover Institute), Benson Roberts (National Association of Affordable Housing Lenders), and Dana Wade (Walker & Dunlop). In addition to exploring the ways tax incentives are used to address the lack of housing supply, attendees discussed legislative opportunities to improve the LIHTC program, such as through the bipartisan “Affordable Housing Credit Improvement Act” (S.1136), which is endorsed by NLIHC (see Memo, 4/19/2021).
Committee Chair Ron Wyden (D-OR) observed that housing costs hit low-income people the hardest. “It’s also a fact that when housing costs go up, homelessness goes up,” said Chair Wyden. “You can save a lot of individual suffering and taxpayer dollars tomorrow by building more housing today.” Ranking Member Mike Crapo (R-ID) cited NLIHC’s The Gap report on the affordable housing shortage in his remarks, noting that “[n]ationwide, there is a shortage of about 7 million affordable rental homes available to lower-income Americans and the gap between demand and supply increases each year. To provide more affordable housing, there are existing tools in the tax toolbox that provide incentives for builders to create more affordable homes.” Both Senators touted the Affordable Housing Credit Improvement Act as offering one solution to the problem.
Throughout the hearing, Senators detailed other pieces of housing legislation that address housing affordability or the eviction crisis. Senator Catherine Cortez Masto (D-NV) asked witnesses about how flexible funding from the “American Rescue Plan Act” could help localities “make historic investments” in housing across the country. Chair Wyden, along with Senators Cortez Masto and Maggie Hassan (D-NH), also drew attention to the “LIFELINE Act” (S.4181), which would allow state, local, territorial, and tribal governments to use Coronavirus State and Local Fiscal Recovery Funds (SLFRF) to make long-term loans to affordable housing developments receiving Low-Income Housing Tax Credits (see Memo, 5/16).
Senator Michael Bennet (D-CO) discussed the “Eviction Crisis Act” (S.2182), a bill he introduced that would create new tools to help end the nation’s ongoing eviction epidemic (see Memo, 6/28/2021). Senator Maria Cantwell (D-WA) emphasized the overwhelming bipartisan support for LIHTC, as well as the massive investments needed to address the housing supply shortage. “We have an inflation problem and part of that is housing,” explained Senator Cantwell. “It’s a supply crisis. Unless we increase LIHTC, we’re not going to get out of this.”
View the hearing at: https://bit.ly/3IXLbZL
Read the text of the “Affordable Housing Credit Improvement Act” at: https://bit.ly/3yXCnif