HUD Report: “Worst Case Housing Needs” Rose in 2015August 10th, 2017 by Editor
Last week, NAHB called on Congress to pass the Affordable Housing Credit Improvements Act of 2017 (S. 548), a bill that would push for the construction of more rental apartments and help ease the affordable housing crisis in the U.S.
MacDonald told the Senate Finance Committee during testimony that the country must increase housing production to meet this growing need.
“S. 548, a bipartisan bill championed by Sens. Maria Cantwell (D-Wash.) and Orrin Hatch (R-Utah), takes a significant and needed step to boosting supply by increasing Low Income Housing Tax Credit (LIHTC) allocations by 50 percent,” said MacDonald. “Enacting this bill is expected to result in an additional 400,000 LIHTC units over the next 10 years. NAHB estimates that added construction would increase federal tax revenue by $11.6 billion and state and local revenues by $5.6 billion.”
More than one in four of all renters in the U.S. are severely cost burdened, according to the Harvard University Joint Center for Housing Studies.
“Fees, regulatory compliance, modern building and energy codes, building materials, land and labor costs determine whether a project is financial viable,” said MacDonald. “If we want to provide affordable rental housing for lower-income households, we cannot do so without a subsidy.”
This is why NAHB believes that LIHTC, a public-private partnership, could be a powerful weapon to ease the crisis. The program has produced and financed more than 2.9 million affordable apartments for low-income families, seniors and individuals with special needs since it was launched in 1986.
Additionally, the tax credit is an vital job creator. It would generate approximately $7.1 billion in economic income and roughly 95,000 jobs each year across several industries, according to NAHB.
The proposed legislation would further promote the building of affordable housing by permanently locking in the 4 percent credit rate for acquisition and bond-financed projects. That would provide more certainty and flexibility in financing these properties. In addition, the legislation would use energy tax incentives in combination with LIHTCs to fight local opposition to affordable housing projects by prohibiting local approval and contribution requirements.
“The nation lacks enough affordable housing for hard-working families,” said MacDonald. “The only effective long-term solution is to increase supply. Passing this bipartisan legislation would greatly enhance our ability to meet the growing demand for more affordable rental units.”
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