CARH’s BROADCAST EMAIL—Legislative Alert
January 16, 2024
Today, the Senate Finance Committee and the House Ways and Means Committee announced a $78 billion tax package deal, to be introduced as The Tax Relief for American Families and Workers Act of 2024, that includes two important Housing Credit provisions.
The ACTION Campaign (ACTION), a national, grassroots coalition of 2,400 national, state, and local organizations and businesses calling on Congress to protect, expand, and strengthen the Low-Income Housing Tax Credit (Housing Credit), and which CARH is a steering committee member, shared the following information on the deal:
ACTION is excited to announce that key Housing Credit provisions from the Affordable Housing Credit Improvement Act (AHCIA) have been included in a $78 billion deal on a tax package struck by House Ways and Means Committee Chair Jason Smith (R-MO-08) and Senate Finance Committee Chair Ron Wyden (D-OR) and released publicly this morning. The tax package contains two key Housing Credit provisions:
- Temporary restoration of the 12.5 percent cut the Housing Credit suffered in 2022 after a temporary allocation increase expired. The deal would increase 9 Percent Credit authority for calendar years 2023 through 2025. State Housing Credit Agencies would need to use the additional 2023 authority by the end of 2024, as states have two years in which to use annual authority before it is redistributed through the National Pool.
- Temporary change to the Private Activity Bond (PAB) threshold test, lowering it from 50 percent to 30 percent for 4 Percent properties financed with multifamily Housing Bonds that have an issue date before 2026. To qualify, buildings must be placed in service after December 31, 2023.
The bill includes language to address questions about properties receiving bond authority from multiple bond issuances in different years by allowing buildings in the financing process that have already received a portion of the bond authority they need to benefit from the 30 percent test, as long as at least five percent of their aggregate basis is financed with bonds that have an issue date in either 2024 or 2025. It also provides that acquisition/rehabilitation buildings in which the acquisition aspect of the development placed in service prior to December 31, 2023, get to qualify for the 30 percent test on the cumulative basis of the acquisition and rehabilitation, so long as the rehabilitation placed in service date is in 2024 or later.
ACTION is deeply grateful to Chairs Wyden and Smith, the lead sponsors of AHCIA, and to all Members of Congress who advocated for these provisions in the deal.
AHCIA Senate lead sponsor Maria Cantwell (D-WA) said, “This is the biggest investment in housing in 35 years–and greatly needed. It will provide over 200,000 new units nationwide over the next two years. In the State of Washington, it will mean over 6,000 new units. The supply catch-up will help working families in both urban and rural areas across the country, and I’m appreciative of Sen. Wyden and Rep. Smith for including this critical investment in the deal announced today.”
“The Low-Income Housing Tax Credit continues to be an important tool to drive investment in the affordable rental housing market, strengthening communities and generating economic development in areas that need it most. I am pleased that provisions from our Affordable Housing Credit Improvement Act were included in the Tax Agreement, which will provide a much-needed boost in housing supply and benefit seniors and working families in Illinois and throughout the country,” said AHCIA House lead sponsor Darin LaHood (R-IL-16).
But we still have work to do, as the deal’s enactment is not guaranteed. Reporting from Punchbowl News suggests that the two minority lead tax negotiators, House Ways and Means Ranking Member Richie Neal (D-MA-01) and Senate Finance Committee Ranking Member Mike Crapo (R-ID), are yet to sign off on the package. While both support the Housing Credit, other aspects of the bill could impact their position on the package overall.
Also, the precise path to passage remains unclear. Potential avenues include positioning it as a standalone bill or attached to another legislative vehicle like the appropriations continuing resolution, both of which present logistical challenges. Moreover, time is short. Congress must enact the bill before the 2023 tax filing season starts on January 29.
Thank you to all ACTION members and partners who have been working to advocate for the inclusion of these provisions in this tax framework. Your hard work has paid off and this is a positive step forward! We will continue to keep members updated on opportunities to weigh in as we move forward. For now, be sure to thank members of Congress who support the AHCIA and conveyed that support to tax committee leads.
This legislative bill and what it may mean to CARH members will be discussed at CARH’s upcoming Midyear Meeting in Charleston, South Carolina.
For other news and information affecting the affordable rural housing industry, please visit the Newsroom on CARH’s website, www.carh.org.