Low Income Housing Tax Credit (LIHTC) – Page 2

Policymakers Emphasize Affordable Housing Incentives, Increasing Supply

Posted on January 26, 2024January 26, 2024 by Abigail Grenadier

Three U.S. Senators discussed national housing policy with industry leaders and Roundtable members during this week’s State of the Industry (SOI) meeting. (See Meeting agenda)

Need for Housing Incentives

Senate Finance Committee Chairman Ron Wyden (D-OR) discussed the importance of expanding and extending the Low-Income Housing Tax Credit (LIHTC), which was included in a tax package advanced by the House Ways and Means Committee last week by a vote of 40-3. Sen. Wyden negotiated the $77 billion bill with Ways and Means Chairman Jason Smith (R-MO) and commended the overwhelming margin of bipartisan support in the committee vote. (Roundtable Weekly, Jan. 19)

Sen. Maggie Hassan (D-NH), center, discussed what can be done to address U.S. housing challenges with Kathleen McCarthy, left, (Chair-Elect, The Real Estate Roundtable | Global Co-Head of Real Estate, Blackstone), and Shaun Donovan, right, (CEO and President, Enterprise Community Partners |former HUD Secretary and OMB Director). Sen. Hassan spoke about the urgent need for national policy to encourage development of more workforce housing, while Mr. Donovan noted the congressional tax bill under consideration would create 200,000 new affordable housing units.

Sen. Debbie Stabenow (D-MI)– introduced by Roundtable Chair Emeritus (2012-2015) Robert Taubman (Chairman, President & CEO, Taubman Centers, Inc.) – spoke about legislative efforts to revitalize downtowns. Sen. Stabenow referred to the recent tax package as an encouraging development for affordable housing, yet noted how more is needed to incentivize conversions of commercial properties to multifamily use. Stabenow is an original co-sponsor of the Revitalizing Downtowns Act (H.R. 4759) to encourage adaptive use of older buildings.

Housing policy and incentives advocated by The Roundtable to encourage more affordable housing supply are topics weaved throughout RER’s 2024 Policy Priorities. (See Executive Summary)

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Congress Extends Government Funding Until March, House Ways & Means Approves Tax Package with LIHTC and Business Provisions

Posted on January 19, 2024January 19, 2024 by Abigail Grenadier

President Biden signed legislation today that averts a partial federal government shutdown by extending federal funding to March 1 and 8. The stopgap, passed by Congress yesterday, gives policymakers limited time to negotiate 12 additional bills at an agreed-upon $1.59 trillion limit to fund the government through the end of its fiscal year on Sept. 30. (Associated Press, Jan. 19 | (Politico and The Hill, Jan. 18)

Stopgap Funding

Today’s stopgap is the third “continuing resolution” Congress has cleared since the start of the current fiscal year on Oct. 1. Intense opposition from members of the conservative House Freedom Caucus led Speaker Mike Johnson (R-LA) to reach an agreement with Democrats to support the measure. (Wall Street Journal, Jan. 18)

A similar short-term spending bill last October led to the ouster of former Speaker Kevin McCarthy (R-CA) by House conservatives. (Wall Street Journal, Jan. 8)

Bipartisan Tax Package Advances

Meanwhile, the House Ways and Means Committee today marked up the $77 billion Tax Relief for American Families and Workers Act of 2024 negotiated by Senate Finance Committee Chairman Ron Wyden (D-OR) and Ways and Means Chairman Jason Smith (R-MO). (National Public Radio, Jan. 16)

No amendments were adopted, and the bill passed overwhelmingly by a vote of 40-3. See Chairman Jason Smith’s (R-MO) opening statement and video of the markup.

Provisions in the tax bill affecting real estate include:
- Low-Income Housing Tax Credit
  A Roundtable-supported three-year extension (2023–2025) of the 12.5 percent increase in LIHTC allocations to states. Even more importantly, the agreement reforms LIHTC’s tax-exempt bond financing requirement, which will allow more affordable housing projects to receive LIHTC allocations outside of the state cap, and without requiring projects be financed with 50% tax-exempt bonds.
- Business Interest Deductibility
  A retroactive, four-year extension (2022–2025) of the taxpayer-favorable EBITDA standard for measuring the amount of business interest deductible under section 163(j). The changes do not alter the exception to the interest limitation that applies to interest attributable to a real estate business.
- Bonus Depreciation
  Extension of 100 percent bonus depreciation through the end of 2025. As under current law, leasehold and other qualifying interior improvements are eligible for bonus depreciation. In 2026, bonus depreciation would fall to 20 percent and expire altogether after 2026.

Other provisions in the agreement include reforms to the child tax credit, the expensing of R&D costs, disaster tax relief, a double-taxation tax agreement with Taiwan, and a large pay-for that creates significant new penalties for abuse of the employee retention tax credit (ERTC) rules and accelerates the expiration of the ERTC.

Sen. Wyden and senior congressional staff will discuss tax legislation with Roundtable members during The Roundtable’s all-member 2024 State of the Industry Meeting in Washington next week.

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Senate Finance Committee Chair Aims to Include Workforce Housing Tax Incentive in 2024 Tax Package

Posted on December 15, 2023December 15, 2023 by Abigail Grenadier

The Roundtable and 12 other national real estate organizations wrote to congressional tax writers on Dec. 8 in strong support of the Workforce Housing Tax Credit (WHTC) Act (S. 3436), which would create a new tax incentive aimed at increasing the supply of moderate-income rental housing. The Senate’s top tax writer, Finance Committee Chair Ron Wyden (D-OR), above, said this week that there is a “real window of opportunity” to pass bipartisan housing legislation in the coming months that could be folded into a possible 2024 tax package. (WHTC bill summary, Dec. 7 | Coalition letter, Dec. 8 | Wyden’s Senate floor remarks, Dec. 12 | Tax Notes, Dec. 13)

Affordable Housing Tax Credits

Sen. Wyden told Tax Notes that housing tax credits “will be part of the discussions we’ll have to have” with House Ways and Means Chairman Jason Smith (R-MO) as they discuss elements for a possible tax package in the new year.

The Senate Finance Committee Chairman also commented on the Senate floor about his introduction last week of the WHTC Act (S. 3436) with Sen. Dan Sullivan (R-AL), Rep. Jimmy Panetta (D-CA) and Rep. Mike Carey (R-OH). “Our bipartisan proposal, based largely on the success of the Low Income Housing Tax Credit (LIHTC) would help spur a juggernaut of new housing construction,” Wyden said. (Video of floor remarks | Roundtable Weekly, Dec. 8)

Led by the National Multifamily Housing Council, the Dec. 8 industry coalition letter stated, “We believe that the Workforce Housing Tax Credit Act will only serve to complement the LIHTC.” The organizations emphasized that the WHTC would spur the development of housing targeted to renter households who face affordability challenges yet are ineligible for federal subsidies.

WHTC & LIHTC

The WHTC would build on the successful LIHTC by enabling state housing agencies to issue similar tax credits to developers for the construction or rehabilitation of income-capped rental housing. (One-page Senate Finance Committee summary and WHTC bill text)

WHTC credits could be used to build affordable housing for tenants between 60% and 100% of the area median income, or transferred to the State’s LIHTC allocation for housing aimed at lower-income tenants (generally below 60% of area median income). (Congressional Research Service summary of the LIHTC, April 26)

Roundtable President and CEO Jeffrey DeBoer stated, “Tax policy should support and encourage private sector investment that boosts the supply of affordable and workforce housing. The Workforce Housing Tax Credit Act would build on time-tested tax incentives like the low-income housing tax credit and further facilitate the conversion of underutilized, existing buildings to housing. We welcome this positive step forward for our nation’s housing supply.” (Roundtable Weekly, Dec. 8)

In the House this week, Rep. Jimmy Gomez, D-CA), reintroduced the Rent Relief Act of 2023, which would create a new tax credit for renters of a personal residence to cover part of the gap between 30 percent of their income and actual rent. Tax Notes, Dec. 13)

Rep. Gomez told Tax Notes this week that House tax writers hope to include the rent relief bill, along with Gomez’ Revitalizing Downtowns Act (H.R. 419) in bipartisan discussions about a potential tax package. H.R. 419 would provide an investment tax credit for 20 percent of the cost of converting office buildings to other uses. (Rep. Gomez news releases, July 28 and Dec. 12 | news release, Dec. 12 | Roundtable Weekly, Aug. 11)

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Senate, House Bills Introduced to Spur Workforce Housing Development

Posted on December 8, 2023December 14, 2023 by Abigail Grenadier

Bills introduced yesterday in the Senate and House would create a new tax incentive aimed at increasing the supply of moderate-income rental housing. The legislation seeks to expand the construction and rehabilitation of housing for middle-class families and young people starting their careers, while enabling workers to live in communities where they are employed. (Senate Finance Committee news release and bill summary, Dec. 7)

Workforce Housing Tax Credit

Senate Finance Committee Chair Ron Wyden, (D-OR) and Sen. Dan Sullivan (R-AL), along with Reps. Jimmy Panetta (D-CA) and Mike Carey (R-OH), introduced the bipartisan Workforce Housing Tax Credit (WHTC) Act to build on the successful Low-Income Housing Tax Credit (LIHTC) by enabling state housing agencies to issue tax credits to developers, which would subsequently be sold to investors. (1-page Senate Finance committee summary and WHTC bill text)

WHTC credits could be used to build affordable housing for tenants between 60% and 100% of area median income, or transferred to LIHTC for tenants generally below 60% of area median income. (Congressional Research Service summary of the LIHTC, April 26)

State housing finance agencies could allocate WHTC credits to developers through a competitive process. The tax credits could also be provided to developers with a 15-year compliance period and 30-year extended commitment. (Committee summary)

Sen. Wyden’s committee previously held a March hearing on “Tax Policy’s Role in Increasing Affordable Housing Supply for Working Families” focused on the need to expand affordable housing for working families.

Roundtable Support

The Roundtable strongly supports the WHTC. Roundtable President and CEO Jeffrey DeBoer stated, “Tax policy should support and encourage private sector investment that boosts the supply of affordable and workforce housing. The Workforce Housing Tax Credit Act would build on time-tested tax incentives like the low-income housing tax credit and further facilitate the conversion of underutilized, existing buildings to housing. We welcome this positive step forward for our nation’s housing supply.”

The Roundtable’s Real Estate Capital Policy Advisory Committee (RECPAC) has formed an Affordable Housing Working Group, which is working with the Research Committee to develop proposals on expanding the nation’s housing infrastructure.

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Roundtable Comments on Clean Energy Tax Credits for Low-Income Communities, Housing

Posted on June 30, 2023October 27, 2023 by Trey Jackson

The Real Estate Roundtable submitted comments today on a proposed rule from the IRS and Treasury Department regarding “bonus” tax credits for renewable energy investments in low-income communities, passed by Congress as part of the Inflation Reduction Act (IRA). (Roundtable Comment Letter, June 30)

Solar, Wind Bonus Credits

IRA Section 48(e) establishes a Low-Income Communities Bonus Credit Program to address climate, affordable housing, and environmental justice challenges. (Treasury news release, Feb. 13, 2023)
Taxpayers must apply to the IRS through a competitive process to receive any bonus credits under the Program.
The bonus can provide extra tax credits to help cover the costs of solar, wind, and storage facilities. See The Roundtable’s chart, “Base” and “Bonus Rate” Amounts Relevant to Commercial and Multifamily Buildings (May 25, 2023).
Taxpayers who qualify can layer an extra 10% bonus—above “base rate” credit amounts—for renewable projects in low-income communities defined in the IRA as census tracts that qualify for new markets tax credits.
The bonus can increase to an extra 20% for clean energy investments that are part of low-income rental housing—such as housing supported by LIHTCs or Section 8 “housing choice” vouchers.

Roundtable Comments

Treasury and IRS proposed a rule on June 1 to implement the low-income bonus program. Today’s comments from The Roundtable seek greater clarity and certainty for building owners that may access the bonus credits, raising the following points:
- The bonuses are available only for solar or wind projects that generate under 5 megawatts of electrical output. The Roundtable requested a more straightforward rule for what constitutes a “single project” for purposes of this output threshold.
- The IRA’s text requires that multifamily building owners must share “financial benefits” of renewable energy produced on-site with tenants. The Roundtable’s comments stressed that any such benefits should not depend on utility bill savings that accrue directly to tenants—because owners cannot measure, track or control energy consumption in sub-metered leased units.
- Low-income housing supported by non-federal programs through state- and local-level housing finance agencies or public housing authorities should also be eligible for the IRA’s low-income bonuses.
- The proposed rule would offer a preference, not based in the statute, for non-profit owners to receive bonus credit allocations. The Roundtable’s comments urge there should be no bias against business taxpayers to receive the bonus to further the Biden administration’s climate policy goals for rapid deployment of renewable energy investments in low-income communities.

Future Roundtable comments on IRA topics are in the works. Feedback on a proposed rule to buy-and-sell certain clean energy credits is due August 14. In addition, proposed rules to implement the 179D tax deduction for energy efficient retrofits of commercial buildings are expected this summer.

Prior comments, information and summaries on The Roundtable’s advocacy efforts regarding clean energy tax incentives are available on our Inflation Reduction Act resources page and in Roundtable Weekly (Dec. 2, 2022 and Nov. 4, 2022).

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Roundtable and Industry Coalitions Urge Congress to Act on Affordable Housing Measures

Posted on May 26, 2023November 17, 2023 by Trey Jackson

Affordable Housing Industry Coalition May 2023

The Real Estate Roundtable and 18 other real estate organizations urged Congress on May 23 to work with the Biden administration, housing providers, lenders, and other stakeholders to pursue bipartisan solutions to increase the nation’s supply of housing. (Coalition letter, May 23)

“Yes in My Backyard”

This week’s joint letter from the Housing Affordability Coalition detailed a wide range of legislative proposals and policy measures that lawmakers should immediately enact to address the nation’s housing affordability crisis.
The industry coalition supports legislation that would eliminate harmful land use policies, promote affordable housing near public transit, and support local government efforts to expand housing supply.
Separately, The Roundtable joined another coalition of 285 housing, business, and municipal organizations with a show of focused support for the bipartisan, bicameral Yes In My Back Yard (YIMBY) Act, reintroduced on May 18. (YIMBY Coalition letter)
The bill requires localities that receive certain federal HUD grants to submit a public report on whether they have local policies in place that remove exclusionary zoning tactics. Encouraging high-density development is “an essential first step in decreasing barriers to new housing of all price levels,” the YIMBY Act coalition letter states.
The YIMBY Act passed the House without opposition in 2020. It is championed in the Senate (S. 1688) by Todd Young (R-IN) and Brian Schatz (D-HI), and in the House (H.R. 3507) by Reps. Derek Kilmer (D-WA) and Mike Flood (R-NE). (YIMBY Act summary by Up for Growth)

Tax Measures

This week’s Housing Affordability Coalition letter encourages Congress to expand the low-income housing tax credit, create a new middle-income housing tax credit, and establish a dedicated tax incentive to promote the conversion of underutilized office and commercial buildings to rental housing.
The letter also supports tax measures that have not been reintroduced yet in the 118^th Congress, including incentives to encourage neighborhood revitalization, accelerated depreciation of high-performance building equipment, and reduction of the basis increase necessary to qualify a multifamily rehabilitation project for Opportunity Zone purposes.
The industry coalition expressed support for the Biden administration’s proposed solutions such as its Housing Supply Action Plan and investments that are part of its FY2024 federal budget proposal. (Roundtable Weekly, May 22, 2022 and White House fact sheet, March 9, 2023)

On March 7, the National Multifamily Housing Council (NMHC) and National Apartment Association (NAA) offered joint testimony before a Senate Finance Committee hearing on “Tax Policy’s Role in Increasing Affordable Housing Supply for Working Families.” (Roundtable Weekly, March 10)

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Lawmakers Reintroduce Bill to Reform, Expand the Low-Income Housing Tax Credit

Posted on May 19, 2023October 27, 2023 by Trey Jackson

Low income housing SFO residences

Bipartisan, bicameral legislation introduced last Thursday would significantly expand and improve the low-income housing tax credit (LIHTC). The tax credit, strongly supported by The Real Estate Roundtable, subsidizes the construction, rehabilitation, and preservation of affordable rental housing for low- and moderate-income tenants.

Increasing Supply

The Affordable Housing Credit Improvement Act (AHCIA) would finance nearly two million affordable homes over the next 10 years. (Affordable Housing Tax Credit Coalition, 2023)
Led by Sens. Maria Cantwell (D-WA) and Todd Young (R-IN), along with Reps. Darin LaHood (R-IL) and Suzan DelBene (D-WA), the AHCIA (H.R. 3238 and S. 1557) has already garnered nearly 90 cosponsors.

Roundtable President and CEO Jeffrey DeBoer said, “The low-income housing tax credit is a critical and well-designed tool that addresses a pressing issue throughout the country–the lack of affordable rental housing. LIHTC harnesses market forces and the power of the private sector to incentivize the construction and rehabilitation of affordable homes. Countless studies have demonstrated LIHTC’s cost-effectiveness. Inflation has taken a toll on working Americans, but Congress can help reduce the burden of high housing costs by passing the AHCIA reforms.”

A March 7 Senate Finance Committee hearing showed bipartisan policymaker consensus on the need to increase the supply of affordable housing by expanding the LIHTC and other tax incentives. The National Multifamily Housing Council (NMHC) and National Apartment Association (NAA), two key supporters of the AHCIA, offered joint testimony during the hearing. (Roundtable Weekly, March 10)

AHCIA Provisions

A summary of the AHCIA is available here. Among its many provisions, the legislation would:
- Boost the allocation of low-income housing credits to states by restoring the temporary 12.5% increase enacted in 2018 (expired at the end of 2021) and phasing in a 50% increase in the LIHTC allocation cap over two years.
- Lower the threshold of private activity bond financing—from 50 to 25%—required to trigger the maximum amount of 4% housing credits available to individual properties.

The bill would also ensure that low-income housing credit projects that seek to maximize their energy efficiency through use of the section 179D commercial building deduction are not penalized by existing provisions of the law that reduce the basis of the development by the 179D deduction amount.

This change would conform the LIHTC/179D rules to be consistent with those that apply to LIHTC and other energy tax incentives, such as the section 48 investment tax credit. (See the bill’s section 309, page 31 and The Roundtable’s Fact Sheet: “IRA Clean Energy Tax Incentives Relevant to U.S. Real Estate”, April 6)

While movement on LIHTC legislation is unlikely before the debt ceiling debate is resolved, the broad-based, bipartisan support for AHCIA could lead to Congressional action on the bill later in the year. (News – The Affordable Housing Tax Credit Coalition)

Domestic Content

In related news, the Internal Revenue Service (IRS) released a notice this week on “made in the USA” guidance that can increase clean energy tax credits. The Inflation Reduction Act (IRA) offers a “bonus” tax credit of up to 10% for solar, wind, battery storage, and other projects that use iron, steel, and components manufactured in the U.S. (JD Supra, May 16)

The “domestic content” notice provides initial guidance until the Treasury Department proposes rules on the subject. A fact sheet prepared by The Roundtable keeps track of various federal agency actions that implement IRA tax incentives of significance to the real estate sector.

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Congressional Tax Writers Focus on Policies to Increase Supply of Affordable Housing

Posted on March 11, 2023October 27, 2023 by Trey Jackson

NMHC President testifying on Affordable Housing Legislation aimed at increasing the nation’s supply of affordable housing was introduced by Senate and House tax writers this week while the National Multifamily Housing Council (NMHC) and National Apartment Association (NAA) offered joint testimony before a March 7 Senate Finance Committee hearing on “Tax Policy’s Role in Increasing Affordable Housing Supply for Working Families.” (NMHC President Sharon Wilson Géno, above and MarketWatch, March 9)

Solutions to Meet the Need

A new report from real estate brokerage Redfin shows that the number of affordable home listings fell 53% from last year—the largest annual drop in Redfin’s records, which date back to 2013. (The Hill and Redfin news release, March 3)
The National Low Income Housing Coalition estimates there is a shortage of 7 million affordable and available rental homes in the United States, while a Rosen Consulting Group study reports the underbuilding gap is 5.5 million units.
This week’s Senate hearing displayed bipartisan policymaker consensus on the need to increase the supply of affordable housing by expanding the Low-Income Housing Tax Credit (LIHTC) and other tax incentives. (TaxNotes, March 8 and Congressional Research Service, “An Introduction to the Low-Income Housing Tax Credit”)
During the hearing, NMHC President Sharon Wilson Géno offered joint testimony that included recommendations to address the affordable housing crisis, including tax policy, regulatory reform, rental assistance, and development incentives. (NHMC News | Video of Géno’s remarks and Written testimony, March 7)

Senate Bills Senate Finance Committee Chairman Ron Wyden (D-OR)

Senate Finance Committee Chairman Ron Wyden (D-OR), above, noted his support for the Affordable Housing Credit Improvement Act (AHCI), the Neighborhood Homes Investment Act, and the reintroduction of the Decent, Affordable, Safe Housing for All (DASH) Act in his opening comments.
Wyden’s DASH Act would strengthen the LIHTC and offer a new Middle-Income Housing Tax Credit (MIHTC) that would provide a tax credit to developers who house tenants between 60 and 100% of the area’s median income. (DASH Act Text | Bill Summary | Section-by-section)
The AHCI would expand the pool of tax credits allocated to states for new affordable housing, make it easier to combine LIHTC with other sources of capital like private activity bonds, and facilitate LIHTC rehab projects.
Wyden added in his opening comments, “Members of Congress also need to keep pushing state and local authorities to cut back on the thicket of zoning rules that get in the way of building the housing Americans need.”
The Roundtable has supported these Senate bills since they were introduced last year. Real Estate Roundtable President and CEO Jeffrey DeBoer previously stated, “Overly restrictive land-use and zoning policies, construction cost increases, and labor shortages are deepening our housing challenges, which now extend across the entire country. Government at all levels needs to be part of the solution, not part of the problem.” (Roundtable Weekly, July 22, 2022)

House Action Capitol bright sky

Reintroduction of similar LIHTC legislation in the House is expected by Reps. Suzan DelBene (D-WA) and Brian Higgins (D-NY). (BGov, March 2)
Additionally, House Ways and Means Tax Subcommittee Chair Mike Kelly (R-PA) and committee member Jimmy Panetta (D-CA) on March 1 reintroduced the More Homes on the Market Act, which would double the capital gains exclusion for home sellers to $500,000 for single individuals and $1 million for married couples. (TaxNotes, March 8)

Despite widespread congressional support for certain affordable housing legislation, prospects for the bills are uncertain until the national debt ceiling issue is addressed—and a tax legislative package is identified that could include such measures.

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Real Estate Coalition Raises Concerns About White House Directive for Federal Agencies to Strengthen Tenant Protections

Posted on January 28, 2023April 25, 2024 by Trey Jackson

A coalition of 12 national real estate organizations raised concerns this week about the Biden administration’s “Blueprint for a Renters Bill of Rights,” which directs federal agencies to strengthen tenant protections. (White House Fact Sheet and Coalition statement, Jan. 25 and GlobeSt, Jan. 26)

Industry Response

The White House on Wednesday issued the “Blueprint” that includes a set of principles to encourage voluntary private sector actions that increase affordable rental units—and drive action by the federal government, state and local partners on tenant rights enforcement. The administration will also launch an effort in the spring to get local governments and housing providers involved in a “Resident-Centered Housing Challenge.” (White House Blueprint for a Renters Bill of Rights and The Washington Post, Jan. 25)
The real estate coalition, which includes the National Multifamily Housing Council (NMHC), expressed disappointment that the White House announcement was “solely focused on renter protections, creating potentially duplicative and onerous federal regulations that interfere with state and local laws meant to govern the housing provider and resident relationship.” (Coalition statement, Jan. 25)
NMCH also issued a statement that acknowledged the White House action did not include the threat of a national rent control policy—and urged the administration to prioritize implementation of its Housing Supply Action Plan issued last May. “The best renter protection is an abundant supply of housing,” NMHC stated.

Affordable Housing Solutions

Brick townhouse on Sam Cooper Blvd near Overtone Park in Midtown district of Memphis, Tennessee

The administration’s Housing Supply Action Plan includes zoning incentives and government financing to address an estimated shortfall of 7 million units for low-income renters nationwide. It aims to create hundreds of thousands of affordable housing units in the next three years, with the goal of closing the nation’s housing supply shortfall in five years. (Roundtable Weekly, May 20, 2022 | PoliticoPro, May 16, 2022 | National Low Income Housing Coalition, April 2022)
On the legislative front, congressional committees showed support last year for the Affordable Housing Credit Improvement Act (S. 1136). The bill (detailed summary here) has not been reintroduced yet in the 118^th Congress. The measure would expand the pool of tax credits allocated to states for new affordable housing, make it easier to combine the Low Income Housing Tax Credit (LIHTC) with other sources of capital like private activity bonds, and facilitate LIHTC rehab projects. (National Multi-Housing News, Jan. 16)
Real Estate Roundtable President and CEO Jeffrey DeBoer said, “Overly restrictive land-use and zoning policies, construction cost increases, and labor shortages are deepening our housing challenges, which now extend across the entire country. Government at all levels needs to be part of the solution, not part of the problem. The Affordable Housing Credit Improvement Act would be an important step forward.” (Roundtable Weekly, July 22, 2022)

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Roundtable Submits Comments to HUD on Barriers to Affordable Housing Development; NMHC Releases 2020 Outlook on States’ Rent Control Efforts

Posted on January 18, 2020May 15, 2024 by Trey Jackson

The Real Estate Roundtable today submitted a suite of policy suggestions (revised January 21, 2020) to the Department of Housing and Urban Development (HUD) to improve access to affordable housing. The comments respond to HUD’s Request for Information seeking public feedback on laws, regulations, land use requirements and administrative practices posing barriers to housing affordability and availability.

Roundtable Recommendations

The Roundtable’s comments offer policies intended to bring more safe, decent, and affordable housing within reach of indigent and low-income households. It also urges HUD to focus on the scarcity of homes accessible to middle class families, and recommends policies to increase both purchase and rental options for teachers, first responders, and other contributors in America’s workforce.

Recognizing “there is no single, best solution to promote housing affordability and increase housing supplies,” The Roundtable suggests a number of strategies to address the challenges and opportunities for public, low-income, and middle-class housing, including:

Expand the Low-Income Housing Tax Credit (LIHTC) program, and provide a similar tax incentive focused on housing development for America’s middle class;
Use GSE reform to re-focus the mission of Fannie Mae and Freddie Mac on liquidity in the mortgage markets for low- and middle-income home buyers, while also encouraging GSE interventions to enhance middle-class rental housing;
Reform procedures and rules under the Community Reinvestment Act (CRA), so banks can receive “credit” when they serve lending needs and increase housing supplies in middle-class neighborhoods (80-120 percent of Area Median Income);
Foster a Yes in My Backyard – or “YIMBY” – environment whenever states and cities seek the “carrot” of federal grants, that obliges localities to implement land-use laws to deliver high density zoning needed to entitle affordable housing projects;
Promote greater production of manufactured housing as a high quality, less costly alternative to site-built homes; and
Direct the General Services Administration to prioritize increasing affordable housing supplies when it disposes of surplus federal properties for re-development by states, localities, and the private sector.

The comments conclude with an assessment of rent control laws which have “a long-term effect to worsen the housing crisis,” The Roundtable wrote to HUD. The letter notes that numerous studies show these laws decrease housing supplies and can illogically benefit high-income earners who have no incentive to move out of controlled units.

In a related development this week, the National Multifamily Housing Council (NMHC) released a report on “Rent Control: A 2019 Recap and a 2020 Look Forward,” which provides a national assessment of rent cap efforts by multiple states. The new report supplements NMHC’s Housing Affordability Toolkit that explains the cost drivers behind apartment development and delves into best practices to address the affordability challenge.

During The Roundtable’s January 28 State of the Industry meeting in Washington, DC, a discussion of housing availability and affordability will feature Federal Housing Finance Agency Director Mark Calabria and Rep. Patrick McHenry (R-NC), Ranking Member of the House Financial Services Committee.

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