Latest news with #AffordableHousingCreditImprovementAct
Politico
09-07-2025
- Business
- Politico
A big, beautiful affordable housing boom?
Presented by Editor's note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day's biggest stories. Act on the news with POLITICO Pro. Quick Fix Everyone agrees that the U.S. lacks affordable housing. An underreported component of President Donald Trump's 'big, beautiful bill' might actually do something about it. The bill's sweeping changes to arcane sections of the tax code could boost the supply of affordable rental units by as many as 1.2 million over the next decade. The adjustments to financing requirements for low-income housing tax credits, along with a higher allocations of tax breaks available for new projects, represent 'the single largest increase in affordable housing development resources in at least 25 years,' said Peter Lawrence, the chief public policy officer at Novogradac — an accounting firm whose analysis of the legislation has been widely cited by housing advocates. Those tax credits serve as the 'premier source of capital for affordable housing supply,' he added (roughly 3.7 million housing units have qualified since 1987). 'There's nothing else that comes close in importance to it.' The U.S.'s housing shortage was a major factor in post-pandemic inflation, and its political salience has only grown since Trump returned to office. New York City mayoral candidate Zohran Mamdani seized headlines with pledges to freeze rents, but his housing platform includes plans to expand state and municipal bonding capacity to boost the supply of affordable units. Rep. Mikie Sherrill, now the Democratic Party's gubernatorial nominee in New Jersey, also treated housing costs as a central theme of her primary campaign and pledged to improve the state's housing stock by making loans and tax credits more readily available. Under the GOP's tax and spending law, developers of low-income housing would only have to finance 25 percent of their building and land costs through a special type of municipal bond — known as private activity bonds, or PABs — to qualify for a widely utilized tax credit. The volume of PAB financing available for those projects is capped and, under the previous regime, developers had to obtain 50 percent PAB financing before they could take full advantage of the credit. By cutting the threshold in half, 'you can do the same amount of housing [development] with half the bonds,' said Emily Cadik, the chief executive officer of the Affordable Housing Tax Credit Coalition. The shift gives states the ability to move ahead with 'twice as much affordable housing with the existing bond cap.' The tax credit provisions that were included in the GOP's megabill derive from a bipartisan measure that has been kicking around Congress for nearly a decade. The Affordable Housing Credit Improvement Act, whose current lead sponsors are Rep. Darin LaHood (R-Ill.) and Sen. Todd Young (R-Indiana), has enjoyed broad bipartisan support for years. Sen. Maria Cantwell (D-Wash.) has been a major force for the legislation since introducing its first iteration in 2016. New York Housing Conference Executive Director Rachel Fee — whose nonprofit group has been critical of Trump's broader housing agenda — applauded the megabill's expansion of low-income housing tax credits for being long overdue. 'It will be a huge boost,' she said. 'It'll get shovels in the ground more quickly and produce affordable housing that low-income renters need.' That's obviously welcome news for banks or real estate firms looking to invest in new construction (to say nothing of pro-growth cheerleaders on Trump's economic team). But Fee included several caveats in her praise. The White House's budget proposal would slash tens of billions of dollars from rental assistance programs — which underpin low-income tenant payments to landlords— and eliminate popular programs that support the development of affordable housing. Other cuts to the social safety net, including reductions in Medicaid and food stamp programs, also pose a threat to household finances of low-income tenants. 'Even just the budget proposal being out there is starting to make the lenders in this space nervous,' said Fee. The threat of those cuts 'make it more difficult to maximize the benefits of this low-income housing tax credit expansion.' IT'S WEDNESDAY — And as always, send MM tips and pitches to Sam at ssutton@ Driving the Day Senate Banking holds a hearing on digital asset markets at 10 a.m. with testimony from Blockchain Association CEO and former CFTC Commissioner Summer Mersinger, Chainalysis CEO Jonathan Levin, Paradigm General Partner Dan Robinson, Ripple CEO Brad Garlinghouse, former CFTC Chairman Timothy Massad and University of Minnesota Law School Professor Richard Painter, the former Associate Counsel to the president and chief White House ethics lawyer … The Chamber of Commerce holds a virtual discussion on 'Trade Wars and the Cost of Doing Business' at 1 p.m. … The Federal Reserve meeting minutes for June will be released at 2 p.m. … Vigilantes? What vigilantes? — From Benjamin Guggenheim: 'As congressional Republicans advanced their megabill in recent months, many fiscal hawks in the party figured they had a powerful force on their side: wary titans of finance who had started sending powerful signals that their appetite for purchasing U.S. debt was not, in fact, endless. Turns out Wall Street was barely a bump in the road.' You didn't hear? It's a trade news cycle now — Trump insisted that he won't punt on his new Aug. 1 tariff deadline, per Nicole Markus. 'There has been no change to this date, and there will be no change,' Trump posted on Truth Social. 'In other words, all money will be due and payable starting AUGUST 1, 2025 - No extensions will be granted.' — He also said he would impose 50 percent levies on imported copper – which sent prices of the commodity soaring — and indicated that 'he could offer pharmaceutical manufacturers at least a year before applying a crippling 200% tariff on their foreign-made products,' per Bloomberg's Joe Deaux and Stephanie Lai. — Richard Saynor, CEO of the Swiss generic pharma giant Sandoz, told POLITICO's Mari Eccles that 'a stick is not going to encourage us to make significant capital investment into a market which is unsustainable.' This will show up labor market data — From Josh Gerstein and Hassan Ali Kanu: 'The Trump administration can move forward with plans to fire tens of thousands of workers across the federal government, the Supreme Court ruled Tuesday.' The Economy A new talking point — Council of Economic Advisers Chair Stephen Miran has a new report spotlighting how inflation on consumer goods has fallen — including for imports — even in the face of Trump's tariff regime. Trump seized on the research as proof that tariffs 'are making our Country 'BOOM,'' as he put it on Truth Social, and said, 'Someone should show this new Study to 'Too Late' Jerome Powell.' (Many economists still expect tariff-related inflation to appear in the consumer price index and personal consumption expenditures index later this summer.) Speaking of Powell… — The president told reporters that the Fed chair 'should 'resign immediately'' if Federal Housing Finance Agency Director Bill Pulte's claim that Powell misled lawmakers about renovations at the central bank's headquarters is proven correct. More big news on housing — FICO officially has a competitor. The FHFA signed off on rule changes that allow lenders to choose to use the VantageScore 4.0 model or Fair Isaac Corp.'s credit score when originating loans backed by Fannie Mae and Freddie Mac, The WSJ's Imani Moise and Katherine Hamilton report. Feeling the heat — Employers are struggling to fill positions that had been staffed by immigrants, reports Aaron Pellish. Agriculture Secretary Brooke Rollins said those roles can be filled by adult Medicaid participants who will soon face stricter work requirements under the GOP megabill. 'The mass deportations continue, but in a strategic way, and we move the workforce towards automation and 100 percent American participation,' she said. Crypto Another big crypto hearing — At today's Senate Banking hearing, Ripple CEO Brad Garlinghouse will encourage lawmakers to 'set clear jurisdictional boundaries for our main financial regulators,' according to a copy of his testimony shared with MM. — New York Attorney General Tish James – who previously cautioned that the Senate's stablecoin legislation lacked adequate guardrails — will provide written testimony urging lawmakers to include language that would block retirement accounts from investing in digital assets. She'll also call for controls to ensure stablecoins are on-shored. Jobs report David Saltiel, former acting director of the SEC's trading and markets division, has joined the parent company of the Texas Stock Exchange as senior managing director of firmwide strategy. The American Securities Association has promoted Kelli McMorrow to chief advocacy officer and Jessica Giroux to chief legal officer. McMorrow previously worked as the group's head of government affairs, while Giroux was general counsel. — Declan Harty Nice work if you can get it — Former U.K. Prime Minister Rishi Sunak has rejoined Goldman Sachs as a senior adviser, report Bloomberg's Todd Gillespie and Alex Morales.
Time Magazine
12-06-2025
- Business
- Time Magazine
The History of the Low-Income Housing Tax Credit—And How it Could Improve Trump's ‘Big Beautiful Bill'
This April, over 150 Republicans and Democrats in Congress came together to introduce the Affordable Housing Credit Improvement Act. The bill aims to address a crisis plaguing nearly every U.S. city: the shortage of low-income and moderate-income housing. Nearly half of American renters spend over 50% of their income on housing, a level that experts consider 'cost burdened," according to the National Low-Income Housing Coalition. The bill works by expanding a tool—the Low-Income Housing Tax Credit (LIHTC) —which has a long and bipartisan history. Everyone from businesspeople to housing advocates have enthusiastically supported it. The credit helps underwrite nearly all construction of affordable housing in the U.S. Whether Congress can pass the Affordable Housing Credit Improvement Act (AHCIA) may come down to whether its Republican boosters can get it into President Donald Trump's ' Big, Beautiful Bill," which the Senate is now working on. It would add cost to the legislation, which could cause rifts between GOP legislators. Yet, history indicates that including it could improve a key source of housing for America's 'working poor.' At the heart of the LIHTC is the idea of giving investors subsidies for building housing. This concept dates back to the era after World War II. Americans may be familiar with the Servicemen's Readjustment Act, the ' GI Bill,' which set up low-interest mortgages for veterans and other home buyers. It produced broad rings of single-family suburban homes around every city. Much less well-known, however, are a series of incentive programs the government enacted to spur the building of rental housing. Read More: A Look at Community Land Trusts and How They Combat the Affordable Housing Crisis During the late 1940s and early 1950s, the administration of Democrat Harry Truman used a tool called FHA 608 to quickly house veterans returning from World War II and the Korean War. It offered long-term loans and free project-planning assistance to apartment developers and guaranteed them a profit. In many cities, that produced more low-rent units than did the nascent U.S. Public Housing program. In the 1960s, another Democratic President, Lyndon B. Johnson, pushed a new set of subsidies. Housing was a top concern for Johnson as part of his War on Poverty —leading to his creation of the Department of Housing and Urban Development (HUD) in 1965. His administration used two programs, FHA 221(d)3 and HUD 236, to provide depreciation tax breaks and ultra-low interest loans to private developers of low- and moderate-income apartments. As nationally syndicated financial columnist Sylvia Porter reported excitedly, 'There are unparalleled opportunities for profit awaiting you, the investor, in low-cost housing … as a result of the meshing of giant new housing and tax laws.' A savvy investor could use the 'big deductions … to offset your other highly taxed income'—a technique called a "tax shelter." As with the earlier Truman program, these subsidies to private developers 'far outdistanced the traditional public housing program' in producing new units, according to the United States Comptroller General Elmer Staats. During the 1980s, federal housing efforts ran headlong into a rising conservative movement, led by President Ronald Reagan. The right was determined to pare back government spending and slash programs. Congress moved to wipe out most aid to help build affordable housing and replace it with Section 8 vouchers. Instead of subsidizing construction, the government would pay landlords the difference between what a renter could afford and the market rate for rent. But business leaders and housing activists revolted. They insisted that Congress should create a strategy to stimulate construction of new units. In 1986, their efforts paid off as part of the sweeping, seminal bipartisan Tax Reform Act. Among its many provisions was the Low-Income Housing Tax Credit. LIHTC gave investors a tax credit—an update of the tax shelter idea—if they developed affordable housing or provided dollars to a non-profit doing that work. From 1986 through to today, the majority of affordable housing in the U.S. has been constructed with this credit. Local or state dollars often supplement it, but without LIHTC, many projects simply would not get built. The credit has worked pretty well for nearly 40 years, an impressive longevity. But two shortcomings have become apparent. The first is that when the Reagan Administration launched the program, the idea of mixed-income housing was not yet a goal. So LIHTC regulations favor projects that serve households that make 60% of an area's median income (AMI). That's an important demographic, including teachers, nurse assistants, food service managers, and other similarly situated individuals. But this target is too narrow on both ends. It often prices out the poorest Americans, who make 30% AMI or less, and it also offers nothing to people making 80% AMI, who increasingly need help with today's skyrocketing rents. A second shortcoming of LIHTC is that funding has not expanded since 1986, when both the population and its needs were dramatically smaller. The result is that, now, meaningful projects are excluded simply because of lack of available money. As Scott Farmer, the head of the North Carolina Housing Finance Agency told me in an interview, 'The worst part of our job is that we get 120 applications a year and can only fund 30 to 35. Those other deals are great deals, we just don't have enough resources to go around.' The new AHCIA bill recently introduced in Congress aims to address both of those problems. It would encourage landlords to mingle tenants at all incomes. Mixed-income projects have been considered best-practice for some 30 years now; the AHCIA will help regulations catch up with that reality. The AHCIA would also dramatically expand the available credits. It would re-institute a temporary increase of 12.5% that Congress approved in 2018 but later allowed to lapse. And it would boost the total by an another 50%, allowing hundreds of additional projects to become reality. The AHCIA has serious support on both side of the aisle in Washington. Its Senate co-sponsors include conservative Republicans Todd Young of Indiana and Marsha Blackburn of Tennessee, along with liberal Democrats Ron Wyden of Oregon and Maria Cantwell of Washington. The House version of the bill already has 130 cosponsors. The difficulty in passing the bill may not be opposition. Rather, it's that relatively small tax-related proposals like AHCIA rarely get enacted as stand-alone legislation. Instead, they often get swept up into fierce and partisan debates over taxes and spending. That's precisely what's happening right now in the Capitol—President Trump's 'Big, Beautiful Bill' includes massive tax cuts along with reductions in social service programs such as Medicaid and SNAP (food stamps), increased funding for deportations and border security, and much more. Despite its broad support, the AHCIA could be overlooked amid the bigger battles. The question will be whether advocates of AHCIA can push some pieces of their legislation into this larger bill. The history provides at least some modest hope. The use of tax credits has deep roots, both among Republicans and Democrats, and a long track-record of success. When Congress adopted LIHTC back in 1986, it came as part of much bigger legislation—so that path is a genuine possibility. Will leaders in Congress take action in 2025? If they do, the Affordable Housing Credit Improvement Act has the potential to do a lot of good, to expand the housing supply, spur the economy, and help address the affordability crisis plaguing America. Tom Hanchett is a North Carolina-based historian. His new book Affordable Housing in Charlotte: What One City's History Tells Us About America's Pressing Problem is published by UNC Press.
Associated Press
29-05-2025
- Business
- Associated Press
Baker Tilly Buzzhouse Podcast: What 2025 Could Bring for Housing Tax Policy
Baker Tilly's podcast series specifically for professionals in the multifamily housing industry On this episode of BuzzHouse, Don Bernards and Garrick Gibson sit down with Thom Amdur, Senior Vice President of Policy and Impact at Lincoln Avenue Communities. Thom shares what he's tracking on Capitol Hill and what could be coming next for affordable housing, tax reform and federal regulation. From the Affordable Housing Credit Improvement Act to changes in NEPA and Davis-Bacon, he breaks down the legislative and administrative shifts likely to impact developers, investors and housing professionals heading further into 2025. Multifamily housing resources For articles, webinars and additional resources for developers, housing authorities, property managers, state housing credit agencies and lenders, visit our multifamily housing page. For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team. Visit 3BL Media to see more multimedia and stories from Baker Tilly
Epoch Times
19-05-2025
- Business
- Epoch Times
Homebuying Season Underperforms as Supply Hits 5-Year High
The sale of existing homes declined in April on a monthly and annual basis amid a jump in supplies, real estate brokerage Redfin said in a May 19 Sales fell to a seasonally adjusted annual rate of nearly 4.2 million units in April, the lowest level since October 2024. It was down 0.2 percent from March and lower by 1.1 percent from April 2024—the first annual decline in seven months. However, there were 1.94 million homes for sale in April, up over 16 percent from a year back. This was the highest level of supply since March 2020. 'Spring is typically the busiest season for the housing market, and with the housing shortage easing and mortgage rates slightly lower than a year ago, one might expect home sales to be stronger,' the brokerage said. 'But Redfin agents report that homebuyers and sellers last month were particularly nervous about tariffs and the ongoing trade war.' Redfin attributed the sluggish housing demand to high home prices and elevated mortgage rates. Related Stories 5/16/2025 5/12/2025 The median home sale price was $438,466 in April, up 1.4 percent year-over-year. The average 30-year-fixed mortgage rate in April was 6.73 percent, up from 6.65 percent in March. Monthly housing payments hit a record high in April. This past week brought some relief from tariff anxiety when the United States and China According to the agreement, the United States lowered tariffs on Chinese imports to 30 percent while China rolled back its U.S. import tariffs to 10 percent. In a May 12 'NAHB urges the administration to move quickly to obtain fair, equitable trade deals with other nations that will result in the elimination of tariffs that are currently hurting building material supply chains and raising construction costs.' The NAHB On the plus side, Hughes said builders are expecting that 'future trade negotiations and progress on tax policy will help stabilize the economic outlook and strengthen housing demand.' Housing Affordability A May 15 'In April, many households didn't know what was next for their jobs, investment portfolios, or budgets. As a result, some potential buyers sat on the sidelines, awaiting further clarity before making significant purchases—including homes,' the report said. There was almost 20 percent more inventory last month compared to a year back, providing buyers with more options. Meanwhile, sellers are increasingly opting to cut prices to attract buyers. 'Though the spring housing market started more sluggishly than desired, activity is underway, with improved options for buyers, steady price growth, and better affordability than last year; all positive indicators for the months ahead,' Zillow said. Meanwhile, lawmakers are taking action to address the affordability issue. Last month, a bipartisan group of senators introduced the Affordable Housing Credit Improvement Act that is expected to help build nearly 1.6 million new affordable homes over the next 10 years, according to an April 29 The legislation is related to the federal government's Low-Income Housing Tax Credit (LIHTC) LIHTC provides states and local agencies with around $10.5 billion in annual budget authority to issue tax credits for acquiring, rehabilitating, or building rental housing for lower-income households. The Act would boost tax credits available to states by 50 percent for the next two years. It would also make a 12.5 percent temporary tax credit increase from 2018 permanent. 'It's time for Congress to meet the housing crisis with the bold solutions it demands, and that starts with increasing housing supply,' said Sen. Ron Wyden (D-Ore.), another bill sponsor. 'Our bill will deliver some much-needed relief to families by supporting existing, successful federal housing programs and building over one million new units of affordable housing. I am all in to bring down costs and make housing more affordable for everyone no matter your zip code.'
