Congress is beginning to act on proposals to stimulate investment in low income housing tax credits (LIHTCs) and advance stalled tax credit housing developments.  Just last week, Congressman Pascrell (D-NJ) introduced a bill (H.R.4109 ) that would attract new investment from traditional and new tax credit investors by allowing them to apply tax credits against taxable revenues up to five years prior (the "carryback" proposal).

We've also learned that Ways and Means Chairman Charlie Rangel (D-NY) plans to introduce a jobs bill with tax credit reform proposals that would extend the 9% exchange program, possibly expand the exchange to 4% credits, increase the carryback for new investors, and expand eligible investors to include S Corporations, specifically community banks.

These proposals, supported by more than 130 national, state, and local organizations, would benefit elderly, working families, and low- and moderate-income communities. According to data compiled by the Rental Housing ACTION Campaign, the enactment of these proposals would lead to 123,000 more affordable apartments constructed or rehabilitated, and 232,000 more jobs created or saved.

These reforms would significantly benefit affordable housing preservation.  The housing credit is not just a program for newly constructed housing. More and more, housing credits- both 9% and 4% tax credits- are being devoted to saving and improving existing affordable housing. 

In fact, in 2007, National Housing Trust data reveals that half of all tax credits were used to rehabilitate existing affordable homes, preserving more than 60,000 affordable apartments.  This includes more than 42,400 apartments in 35 states preserved with 4% tax credits.

We are down to the wire! Given the current economic climate and lack of a wide customer base for the credit, there's not much hope of substantially reinvigorating or re-stimulating the credit without some form of legislative relief.  

Therefore, we continue to urge Congress to:

1. Extend the "exchange" program established in ARRA for another year and permit the exchange of 4% tax credits. This would provide equity to allow stalled tax credit projects to move forward.   

2. Increase the investment carryback period to up to five years. This would immediately stimulate housing credit investment demand.

3. Include potential investors, such as community banks, that are currently not permitted to participate in the program.  This would broaden the investment base.

To learn more about these proposals and how you can support them, visit the Affordable Rental Housing ACTION website. Included are instructions for contacting Congressional staff and various advocacy resources, including state impact fact sheets.

It is time for Congress to restart affordable rental housing investment that will revitalize neighborhoods, provide high quality housing for working Americans, and create jobs. Please take action to support these LIHTC reforms.  

Stay tuned,