As part of an effort to address what it calls America’s growing housing crisis, a bipartisan group in the Senate unveiled a bill this week that aims to boost affordable housing development by expanding the Low Income Housing Tax Credit.
The bill, called the “Affordable Housing Credit Improvement Act,” would increase the Low Income Housing Tax Credit by 50% over its current level.
The bill sponsored by Senate Finance Committee member Maria Cantwell, D-WA and Senate Finance Committee Chairman Orrin Hatch, R-UT, as well as Sen. Ron Wyden, D-OR, and Sen. Charles Schumer, D-NY.
According to Cantwell’s office, under the proposal, the expanded Low Income Housing Tax Credit would help create or preserve approximately 1,300,000 affordable homes over a 10-year period, which would be an increase of 400,000 more units than is possible under the current program.
Cantwell’s office also said that that beyond expanding the Low Income Housing Tax Credit, the legislation would also create a new income-averaging option to help developments maintain financial feasibility while providing a “deeper level of affordability.”
The bill also establishes a permanent 4% credit rate floor for acquisition and bond-financed projects, which Cantwell’s office said will provide more “predictability and flexibility” in financing these projects.
“Affordable housing is a crisis all across America,” Cantwell said.
“With skyrocketing rents and an increase in homelessness, more affordable housing units are a necessity, “Cantwell continued. “That is why today, Senator Hatch and I are introducing legislation to expand the Low Income Housing Tax Credit. By building more affordable housing units across the United States, more people can have a shot at the American Dream.”
According to Cantwell’s office, the Low Income Housing Tax Credit has helped finance approximately 2.9 million homes in the U.S. since its inception in 1986.
Between 1986 and 2013, more than 13.3 million people lived in homes that were financed by the Low Income Housing Tax Credit, Cantwell’s office stated.