Take Action on Key Reforms Needed to Ensure Low-Income Housing Tax Credit Addresses Needs of People with the Lowest Incomes

Congress may enact a tax extenders package before the end of the year, and NLIHC is urging policymakers to use the tax legislation to expand and reform the Low-Income Housing Tax Credit (LIHTC) to better serve extremely low-income (ELI) households. Congress regularly extends expiring tax provisions that are only authorized for a set number of years. With a number of tax provisions up for extension at the end of this year, a tax extenders package represents the best opportunity currently available to expand and make needed legislative changes to the LIHTC program. NLIHC has released a fact sheet and call-to-action tool (see Memo, 10/31) focused on LIHTC reforms and is urging advocates to ask their members of Congress to include these reforms in an end-of-year tax extenders package.

LIHTC is the primary source for financing for the construction and preservation of affordable housing. While an important resource, LIHTC on its own is generally insufficient to support the construction and preservation of homes affordable to households with the lowest incomes. NLIHC is urging Congress to include the following LIHTC reforms in any tax extenders package:

  • Expand the ELI basis boost to 50% for housing developments when at least 20% of units are set aside for households with extremely low incomes or people experiencing homelessness. This provision is included in the bipartisan “Affordable Housing Credit Improvement Act.”
  • Set aside 8% of tax credits to help offset the cost to build ELI developments where at least 20% of units are reserved for households with extremely low incomes or those experiencing homelessness.
  • Designate tribal and rural communities as “Difficult to Develop Areas (DDAs)” to make them automatically eligible for a 30% basis boost and make it more financially feasible for developers to build affordable homes in these communities. These provisions are also included in the bipartisan Affordable Housing Credit Improvement Act.

Learn more about the range of needed changes to LIHTC at: https://bit.ly/3fto1R1

Read the new fact sheet focused on reforms needed for ELI households at: https://bit.ly/3gDnV9o

Advocates can contact their members of Congress through this call-to-action tool: https://p2a.co/4qstqc5

Advocates should continue contacting their members of Congress to urge them to include these provisions in any tax extender package moving forward. Use NLIHC’s Fall and Winter 2022 Advocacy Toolkit to help create your message to Congress, and visit our Take Action page for more ways to get involved!