Albuquerque Journal

Two million affordable houses in underserve­d areas?

Bill would expand pool of money available for home financing

- BY MACKENZIE HAWKINS

WASHINGTON — A bipartisan group of lawmakers is proposing to boost U.S. affordable housing by 2 million units over the next decade by expanding a key tax credit as part of President Joe Biden’s agenda on jobs and the economy.

The Affordable Housing Improvemen­t Act of 2021, spearheade­d by Reps. Suzan DelBene and Jackie Walorski, would permanentl­y increase tax credit allocation­s to states, allow states to fund more projects by easing bond-funding requiremen­ts and expand subsidies for underserve­d communitie­s.

Supporters say the measures could significan­tly reduce a U.S. housing deficit that has grown to nearly 4 million units, according to Freddie Mac. While the plan shares many of the goals of Biden’s infrastruc­ture proposal, which seeks 2 million new housing units over the next eight years, it uses different tactics.

DelBene, a Democrat from Washington, and Walorski, an Indiana Republican, want to make their bill the leading proposal as Congress weighs housing legislatio­n beyond the confines of the $579 billion infrastruc­ture deal struck between Biden and a bipartisan group of senators on Thursday.

“We look forward to working with the administra­tion to get that in the package,” DelBene said in an interview this week.

As part of his American Jobs Plan, Biden has called for $318 billion in spending on housing, including $105 billion in tax credits.

In contrast to the administra­tion’s broad approach, the lawmakers’ proposal focuses on the low-income housing tax credit, which has supported 90% of federally-funded affordable housing since its creation in 1986.

Its track record as a public-private partnershi­p, a congressio­nal aide said, makes the tax incentive the best available vehicle to rapidly expand affordable housing. A previous version of the bill drew broad bipartisan support in the last Congress.

The bill would also expand the pool of money available for financing affordable housing by making permanent a 12.5% increase in tax-credit allocation­s to states approved in 2018, with a 50% increase on that number phased in over the next two years.

That measure aims to counteract local opposition, often known as NIMBYism, that often stall affordable housing developmen­t. The bill would also increase the size of subsidies available to projects for rural, tribal and extremely low-income renters, making more developmen­ts feasible in areas that often struggle to break ground on new projects.

Biden’s American Jobs Plan would boost funding for some of those programs, including investment in rural areas and public housing. His initial plan also envisaged a new tax credit focused on homeowners­hip and a $55 billion increase in the credit for low-income housing.

The tax credit “definitely deserves attention and is certainly a large part of the solution,” said Corianne Payton Scally, a researcher at the Urban Institute. “But I think it would be detrimenta­l to not acknowledg­e that we do have a continuum of programs for a reason. They serve different purposes and they often work together to enable access to the families that need them the most.”

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