Now Is the Time To Invest in Affordable Housing
In late 2017, the affordable housing industry had a brush with disaster when the Tax Reform bill introduced in the House of Representatives proposed eliminating key vehicles to provide funding for affordable housing. Thankfully, by the time the Tax Cuts and Jobs Act bill passed, the tools necessary to provide affordable housing remained safe. However, the initial draft of the bill took affordable housing for granted and pushed an already precarious industry far closer to the edge of a cliff, that could plunge the nation into an unsalvageable emergency.
Our nation has an ever-worsening housing crisis. Even at current levels of affordable housing production, we create less than one third of the affordable housing that is needed by our fellow citizens. Now is the time to invest in affordable housing, not eliminate the mechanisms that create it.
The initial version of the tax reform bill proposed eliminating Private Activity Bonds (PAB) which play a leading role in creating and preserving over half of the affordable housing in the country. The elimination of this vital funding mechanism would have reduced the future supply of affordable rental housing by nearly one million units over the next ten years, causing disastrous ramifications for every state, county, city and town in the country.
The objective of the Tax Cuts and Jobs Act was to push the US economy into a higher gear. Preserving and expanding access to affordable housing is another important policy level that Congress and the President should support. While these tools like PABs may be safe for now, it’s clear that some of our elected officials do not see the value in affordable housing. The reality is that affordable housing (specifically through the LIHTC program) has provided housing to more than 13.3 million people between 1987 and 2013, supports nearly 100,000 jobs in a typical year, and $9.1 billion in economic income, according to the National Association of Home Builders.
Congress should be expanding access to affordable housing to spur economic growth. Destroying affordable housing programs will make it harder to balance the budget, not easier. It is simply wrong to finance tax cuts on the backs of low and moderate-income families who need affordable housing. If we choose to do that, the business community will take a massive hit, causing economic ripple effects throughout the country. As a nation, we cannot afford to make this mistake or even consider it.
There are two bills right now that can help alleviate some of our nation’s affordable housing woes, the Cantwell-Hatch bill and its companion bill in the House of Representatives, the Tiberi-Neal bill. This legislation, bipartisan bills in both the House and the Senate, would boost the supply of affordable housing by increasing Low Income Housing Tax Credit (LIHTC) allocations by 50%. This bill would result in an additional 400,000 LIHTC units over the next decade, which would help to decrease our growing housing crisis.
Other Articles by Thought Leader
