Housing credit remains a bipartisan success
In Washington, it feels like the spirit of ’86. That’s right: ’86, as in 1986. That year, the House, then controlled by Democrats, voted 292-136 to approve legislation that contained a new program, the Low Income Housing Tax Credit (housing credit). A Republican Senate majority approved the bill, also by a wide margin, and President Ronald Reagan signed it.
A bipartisan group of lawmakers is now trying to expand the housing credit. Their colleagues should jump on board. Housing is infrastructure. Housing is health, and right now, the United States lacks an adequate supply of homes to the detriment of our infrastructure and wellness.
Since 1986, the housing credit has produced nearly 4 million affordable housing units. CAMBA Housing Ventures has leveraged the credit to build all our 9% and 4% affordable and supportive housing developments. Senate Finance Committee Chair Ron Wyden, D-ore., and Rep. Jason Smith, R-MO., are pushing the Tax Relief for American Families and Workers Act to allow us to do more. The bill would restore the 12.5% increase in the annual 9% housing credit allocation for 2023-25 and reduce the private activity bond financing threshold for 4% housing credit from 50% to 30% for 2024-25. The legislation also provides a transition rule for buildings with bonds issued.
It is estimated these provisions will create 200,000 affordable housing units nationwide.
These units are badly needed. According to the Action Campaign, nationwide, 12.1 million renters pay more than half of their monthly income on rent. To afford a one-bedroom apartment at the national average fair market rent, a minimum wage worker must work 80 hours a week. How do you do that — and make sure your children get to the doctor or school?
For New Yorkers, Angelenos, and anyone else who lives in large urban metropolis, it feels impossible.
But big cities aren’t the only places where housing prices crowd out workingand middle-class Americans. The Joint Center for Housing Studies of Harvard University notes that 38% of rural renter households are cost-burdened and 19% are severely burdened. Finding a congressional district that has an adequate supply of affordable rental housing is nearly impossible. Ohio needs an additional 270,000 affordable rental units to keep up with demand.
These statistics are fueling the country’s homelessness crisis. Shelters are overflowing, and street encampments are proliferating.
To solve this increase in homelessness and housing instability, we need to build more affordable housing.
The Tax Relief for American Families and Workers Act would allow us to keep more citizens off the streets while contributing to local and national growth. After 38 years, the Housing Credit supports 6.33 million jobs a year. Since 1986, it has generated nearly $260 billion in tax revenues and more than $715 billion in wages and business income. The housing credit provisions in the Tax Relief for American Families and Workers Act will generate more than $34 billion in wages and business income, create 304,000 jobs, and generate almost $12 billion in federal, state and local tax revenue.
For lawmakers, the return on investment is nearly unmatched.
Providing more families with a home of their own will reduce intergenerational poverty and enhance economic mobility. As the National Low Income Housing Coalition points out, Stanford University economist Raj Chetty estimates children who move to lower-poverty neighborhoods see their earnings as adults increase by 31%. We know the children living in our stable, affordable and supportive homes do better in school. That’s why we must also build important supportive services into our affordable housing developments, which help residents lead healthier, more prosperous lives and reduce their need to access government assistance programs.
Nearly 40 years ago, the 99th Congress put differences aside to create a program that has kept millions of working families and children off the streets. We need that spirit again.