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Recently, Harvard University’s Joint Center for Housing Studies (JCHS) released “State of the Nation’s Housing 2015,” which suggests that an expansion of the Low-Income Housing Tax Credit is needed in order to respond to increasing pressures on the program.
Recently, the Senate Finance Committee led by Committee Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) released reports from five bipartisan tax working groups. The groups were tasked earlier this year to examine and recommend changes to particular elements of the federal tax code.
On July 16, bipartisan bills were introduced in both the House and the Senate to provide tax relief to communities affected by natural disasters from 2012 to 2015. The legislation includes provisions to increase allocations of low-income housing tax credits and new market tax credits. The National Disaster Tax Relief Act would provide an increased LIHTC allocation equal to the higher of $8 per person in qualifying disaster areas or 50 percent of a state’s annual LIHTC ceiling.
A low-income housing tax credit’s value originally floated with interest rates, but the credit rate was temporarily fixed at 9 percent under the Housing and Economic Recovery Act (HERA), and this flat rate was again extended through Dec. 31, 2013 and 2014 under two additional legislative acts. The 9 percent minimum credit rate simplified the administration of the program and removed the financial uncertainty and risk associated with underwriting LIHTC-financed properties.
Recently, the J. Ronald Terwilliger Foundation for Housing America’s Families released The Silent Housing Crisis, a white paper documenting the significant housing challenges facing the country and making a call to action by the nation’s political leaders. The nonprofit organization seeks to bring housing policy issues to the forefront as the 2016 presidential race gets underway.
Faced with a shortage of affordable rental housing in Tennessee, the Tennessee Housing Development Agency (THDA) recently issued a new study on the state’s LIHTC program. THDA manages the program in Tennessee and allocates federal tax credits to qualifying projects according to state and federal priorities. The study looked at the 28-year history of the LIHTC program in Tennessee, its effectiveness, as well as areas of greatest opportunity in the near future.
As of publication of this July 2015 issue, no decision has yet come down from the U.S. Supreme Court on Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc., the case that will decide whether it’s within the bounds of the Fair Housing Act to be able to apply the controversial “disparate impact” doctrine.
Recent research has examined the siting patterns of Low-Income Housing Tax Credit (LIHTC) developments, but the reality is that the LIHTC program is not one uniform, national program. Rather, the program is administered by state allocating agencies, each of which has considerable discretion over how to allocate tax credits. In particular, each state issues a Qualified Allocation Plan (QAP), which outlines the selection criteria the state will use when awarding its 9 percent tax credits.
Senator Al Franken (D-MN) and Senate Finance Committee member Rob Portman (R-OH) recently introduced the Housing for Homeless Students Act, S. 1412, which would add a new exemption to the housing credit student rule to allow full-time students to qualify to rent an LIHTC apartment if they were a youth experiencing homelessness as defined in the McKinney-Vento Homeless Assistance Act at any point within the seven years prior to moving into their LIHTC unit, or if they are a veteran and were homeless at any point within the five years prior to moving into their LIHTC unit.
The National Low Income Housing Coalition recently issued a report entitled “Out of Reach 2015.” The report highlights the growing housing affordability crisis in America and the need to expand and preserve the supply of quality affordable housing through programs such as the LIHTC program. It looks at the mismatch between the wages people earn and the price of decent housing. It finds that the gap between what people earn and the price of decent housing continues to grow.
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