Bipartisan Senators and Advocates Agree: Cantwell Proposal Is the “Primary Tool” to Combat Affordable Housing Crisis

If no action is taken, uncertainty could result in a nearly $1 billion drop in affordable housing investment this year

Cantwell: “90% of affordable housing units are built with a [LIHTC] tax credit”

WASHINGTON, D.C. – Today, at a Senate Finance Committee hearing, a bipartisan coalition of senators and housing advocates coalesced around a proposal from U.S. Senator Maria Cantwell (D-WA) as the most effective approach for addressing the nation’s affordable housing crisis. Senator Cantwell’s legislation, the Affordable Housing Credit Improvement Act, would expand the successful Low-Income Housing Tax Credit (LIHTC) and make important fixes to the program.

The hearing, held at Cantwell’s request, sought to address the worsening affordable housing shortage gripping the United States. In less than a decade, as many as 15 million Americans will spend half their monthly income on rent, an increase of 25 percent from current levels.

“I can’t emphasize enough that this is a crisis across many parts of our country. I can tell you that from Seattle to Walla Walla, the housing crisis is real,” said Senator Cantwell. “This is both an urban and rural problem, there are places like Jackson, Mississippi and Baton Rouge that are just right up there with Miami and that there’s places like Clarke [County], Iowa and Douglas [County], Nevada - it’s everywhere.”

Under the Cantwell proposal, which is cosponsored by Finance Committee Chairman Senator Orrin Hatch (R-UT), Ranking Member Senator Ron Wyden (D-OR), and 16 others, the expanded LIHTC would help create or preserve approximately 1,300,000 affordable homes over a 10-year period – an increase of 400,000 more units than is possible under the current program.

The hearing was striking in the extent to which senators from both parties spoke in support of the LIHTC program, presenting an opportunity for bipartisan action as tax reform negotiations begin. A sampling of support from today’s hearing is below:

Joining Cantwell, Hatch, and Wyden to cosponsor the legislation is Senator Charles Schumer (D-NY), the Democratic Leader, as well as Senators Cory Booker (D-NJ), Dean Heller (R-NV), Patrick Leahy (D-VT), Jeff Merkley (D-OR), Lisa Murkowski (R-AK), Brian Schatz (D-HI), Todd Young (R-IN), Michael Bennet (D-CO), Susan Collins (R-ME), Maggie Hassan (D-NH), Johnny Isakson (R-GA), Patty Murray (D-WA), Rob Portman (R-OH), Jeanne Shaheen (D-NH), Dan Sullivan (R-AK), and Bernie Sanders (I-VT).

At today’s hearing, senators and witnesses also discussed the uncertainty injected into the affordable housing market by the prospect of tax reform. Including the expansion of the LIHTC in any tax reform bill ensures investment continues and expands in the affordable housing sector. If Congress takes no action to bolster the program, it is likely that almost $1 billion in investment will be lost in this year alone.

According to the National Association of Home Builders, annual LIHTC development supports approximately 95,700 jobs and $9.1 billion in wages and business income. Enacting the Cantwell-Hatch proposal would create an additional 452,000 jobs over the next 10 years supporting the construction of additional units.

“America's housing affordability crisis affects millions of families in urban, suburban, and rural areas nationwide, and the federal government must do everything in its power to help communities address it—beginning with expanding the Low-Income Housing Tax Credit,” said Anthony J. Alfieri, president, Affordable Housing Tax Credit Coalition. “We commend Senator Cantwell and her colleagues for pursuing a bipartisan solution to this pressing issue and urge every member of Congress to reflect on today’s hearing and support the Affordable Housing Credit Improvement Act of 2017.”

The bill also makes critical reforms to the existing program, including provisions allowing the 58,000 homeless students in the U.S. to finally take advantage of the affordable housing units created with LIHTC, expanding development opportunities in rural and Native communities and providing flexibility and financial feasibility to developments so they can more deeply target their units to the neediest individuals, including the homeless.

Over the past year, Cantwell – along with a coalition of more than 1,300 national, state, and local affordable housing advocates known as the A.C.T.I.O.N. Campaign – built support for expanding the LIHTC Washington state and the country. Cantwell has met with stakeholders and visited affordable housing developments at events in Seattle, Tacoma, Spokane, Vancouver, Walla Walla, Longview, Kent, Bremerton, Bellingham, Portland, New York City and Salt Lake City.

In December of 2015, Cantwell championed the LIHTC and secured a critical fix to the program by permanently extending the credit rates to 9 percent of eligible costs on new construction. This ended an era in which variable rates made financing of affordable housing less predictable.

Since its creation 30 years ago, this tax credit has financed nearly 2.9 million homes across the United States, leveraging more than $100 billion in private investment. Between 1986 and 2013, more than 13.3 million people have lived in homes financed by the LIHTC.

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