Amidst Ongoing Reconciliation Negotiations, Cantwell Calls for Inclusion of Low-Income Housing Tax Credit to Increase Affordable Housing Supply
Assistant Secretary of the Treasury for Financial Markets nominee Joshua Frost: “The supply of affordable housing is a key issue now. LIHTC is a principal venue by which affordable housing supply is created.”
WASHINGTON, D.C. – Today, at a U.S. Senate Committee on Finance hearing, Senator Maria Cantwell (D-WA) called for the inclusion of a significant increase of the Low Income Housing Tax Credit in the Build Back Better reconciliation legislation currently under negotiation in Congress. Cantwell questioned Assistant Secretary of the Treasury for Financial Markets nominee Joshua Frost about the importance of increasing the supply of affordable housing through the Low-Income Housing Tax Credit (LIHTC) in order to address the needs of more than 10 million Americans who pay more than half their income towards rent. More than 90% of affordable housing built in the U.S. depends on LIHTC for financing.
“Our committee here has done great work on the Low-Income Housing Tax Credit, but we still have a tremendous amount of way to go. We have 7 million units that we need to be built and over 10 million people who live in rent burdened conditions, [where] 50% of their income is spent on rent. We have just not kept pace with supply,” said Senator Cantwell.
Senator Cantwell continued, “So if you don't increase LIHTC, you're not going to be increasing the supply of affordable housing. So I just want to hear from you that you believe that we need a robust response here, and that you're going to work within the administration to try to get that.”
Frost responded, “Absolutely, Senator, the supply of affordable housing is a key issue now. And as you flagged, LIHTC is a principal venue by which affordable housing supply is created… Things that focus on increasing the supply of affordable housing, things that focus targeted programs that help with down payment support, which helped folks build wealth more quickly, are all critical to the success.”
Cantwell followed up, “But if we just did those, and we didn't do the supply side, that would be a problem, correct?
Frost replied, “Completely agree.”
“So that’s the point I’m trying to get out…if you’re not increasing supply, then you’re not going to have a place for these individuals to go… We proposed in a in a bipartisan fashion with our colleagues here, Senator Young, Senator Portman, $29 billion in the Affordable Housing Tax Credit, well, a proposal to increase it by 50%... I just hope we put this money there right now, it’s needed,” said Cantwell.
In April, Cantwell led the introduction of the bipartisan Affordable Housing Credit Improvement Act of 2021 along with Sens. Todd Young (R-IN), Ron Wyden (D-OR) and Rob Portman (R-OH). The legislation would expand and strengthen the Low-Income Housing Tax Credit to produce more than 66,000 units of affordable housing around the State of Washington and better serve a number of at-risk and underserved communities. Nationwide, the expanded Low-Income Housing Tax Credit would build more than 2 million new affordable housing units over the next 10 years.
The expansion of the Low-Income Housing Tax Credit and its inclusion in the Build Back Better plan is supported by a wide range of stakeholders. This week, 44 mayors representing communities across 20 states and the District of Columbia — including Mayor Jenny Durkan of Seattle, Mayor Victoria Woodards of Tacoma, and Mayor Cassie Franklin of Everett — sent a letter to President Joe Biden, Senate Majority Leader Chuck Schumer, and Speaker of the House Nancy Pelosi urging them to include the expansion of the Low-income Housing Tax Credit in any infrastructure investment package. Another group of 33 Mayors sent a letter calling on Leader Schumer and Speaker Pelosi to ensure that funding for housing remains a key component of the budget reconciliation bills. And in late August, more than half of the House Democratic caucus signed a letter in support of the Housing Credit provisions in reconciliation.
In September, the House Ways & Means Committee included approximately $29 billion to expand LIHTC in its portion of the Build Back Better plan. According to experts, that investment would build approximately 1.4 million additional affordable housing units over 10 years, and would generate $235 billion in wages and business income, along with $81 billion in tax revenue.
The House Democratic Caucus members’ letter available HERE.
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