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Press Release of Senator Cantwell
Cantwell Applauds Opening of Seattle Housing Facility Developed with Help of Key Tax Credit Program
Seattle housing facility for homeless veterans and youth developed with investment from Low Income Housing Tax Credit program A longtime advocate for LIHTC, Cantwell to introduce bill to help spur affordable housing investment, support construction jobs
Wednesday, September 14,2011
WASHINGTON, D.C. – Today, U.S. Senator Maria Cantwell (D-WA) released the following statement applauding the grand opening in Seattle’s University District of Gossett Place, a low income housing facility for homeless veterans and young adults developed with the help of a federal tax credit program consistently championed by Cantwell.
Funding from the Low Income Housing Tax Credits (LIHTCs) helped develop the new affordable living facility, which supported 215 construction jobs and 12 architects and engineers. The project is also creating 15 permanent jobs. A longtime advocate for the LIHTC program, Cantwell plans to introduce a bill that would improve the LIHTC program and provide greater certainty for financing projects. Cantwell’s bill would help spur investment in the development of affordable housing and support construction jobs nationwide.
“Gossett Place is an example of the success of the Low Income Housing Tax Credit program and why we need to continue to invest in it,” Cantwell said. “This program creates jobs in our communities and provides critical affordable housing for those in need. That is why I plan on introducing legislation to improve the financing of projects like Gossett Place that provide homes for Washington families and stimulate our local economy.”
This year, affordable housing projects in Washington state are being developed in King, Kitsap, Stevens, Whatcom, Spokane, Pierce, and Yakima counties. These housing projects provide a combined 914 housing units and support construction jobs across the state.
The Low-Income Housing Tax Credit, the nation’s primary mechanism for developing affordable rental housing, is a permanent fixture of the tax code that provides a 70 percent subsidy for the development of affordable rental housing. States leverage this funding to attract private investment and move forward on housing projects. LIHTC helps finance 90 percent of affordable housing projects in the United States. Since the program was created in 1986, it has helped finance more than two million affordable apartments nationwide, including nearly 50,000 in Washington, and has created 140,000 construction jobs annually.
Cantwell has been a consistent advocate for the LIHTC program. Cantwell’s bill would eliminate the uncertainty and financial risk of the current floating rate system that is used by the Low Income Housing Tax Credit program to determine credit allocations for certain affordable housing projects.
Currently, LIHTC allocations are calculated by weighing the cost of the project against the cost of borrowing by the federal government. With today’s very low interest rates, that produces very low tax credit allocations per project. In effect, lower federal borrowing rates reduce the amount of LIHTC allocations supporting affordable housing development, thereby imposing more financial risk on the developer.
Federal Reserve Chairman Ben Bernanke announced on August 9th that the Federal Reserve intends to keep interest rates exceptionally low through mid-2013. Cantwell’s bill would guarantee a certain credit allocation for projects across Washington state and the nation even as federal interest rates remain low, ensuring affordable housing projects can receive the credit support they need to continue.
On August 26th, Cantwell participated in a forum in Tacoma on continuing the growth of affordable housing in Washington state.