Senator Wyden Introduces DASH Act to Ensure Affordable Housing for All
This week, the Chairman of the Senate Finance Committee, Senator Ron Wyden (D-OR), introduced the Decent, Affordable, Safe Housing for All (DASH) Act. The bill seeks to make a generational investment to house all people experiencing homelessness, tackle the housing affordability crisis, increase the construction of new affordable homes, and expand homeownership opportunities. If enacted into law, the proposed legislation would provide Housing Choice Vouchers to all families or individuals experiencing homelessness, or who are at risk of homelessness. The bill would also institute important reforms to local zoning and housing developments to increase the construction of affordable housing and would implement tax policy to invest in homeownership more wisely, rent support for low-income families and new construction of affordable housing nationwide.
“Housing is a human right, yet millions of Americans pay more than half of their monthly take-home pay to keep a roof over their head. And more than half a million Americans don’t have housing at all … it is time America’s lawmakers get with the program and enact 21st century housing policies that adequately address 21st century challenges” said Senator Wyden during the introduction of the DASH Act. The bill would make several substantial investments in affordable housing, including:
- Providing $10 billion for the Housing Trust Fund: The legislation would provide $10 billion for the Housing Trust Fund (HTF) for the next ten years to states to acquire, develop, or rehabilitate deeply affordable housing. States would be required to commit their entire allocation to eligible activities within five years, though the construction does not have a time limit. The intent is for states to efficiently construct a sufficient supply of deeply affordable housing that cannot otherwise be built given current resources and market conditions. Funding will be allocated to states through the existing HTF formula. However, the Secretary is instructed to, within one year of enactment, propose to Congress a new formula that takes into account: (1) the gap between supply and demand of available and affordable housing for extremely low-income renters in the state; (2) the average poverty rate over the preceding three years; (3) the average rental vacancy rate over the preceding three years; and (4) the ratio of severely cost-burdened renters in the state to the number of those renters in all states, as well as the economic impacts of the COVID-19 pandemic.
- Supporting the Development of New Affordable Housing: The DASH Act seeks to invest in innovative, sustainable, and proven methods to increase production of affordable housing nationwide by authorizing programs to diversify housing development, such as providing $10 million for modular housing construction pilot projects. Additionally, Under the DASH Act, any jurisdiction that changes its zoning and land use practices after enactment of the legislation would become eligible for a grant award depending on size of the jurisdiction. The funds may be used for any approved activity as determined by the Community Development Block Grant (CDBG) program. Cities under 80,000 residents would be awarded a maximum of $5 million while cities larger than 1 million could be awarded up to $125 million for adopting pro-housing policies. Those policies are:
- Allowing development of duplexes, triplexes and quadplexes, or other multifamily housing, in areas zoned for single-family homes;
- Allowing the subdivision of existing single-family homes into multiple units;
- Issuing permitting or zoning waivers for development of accessory dwelling units (ADUs), additions to existing single family homes to create duplexes, triplexes or fourplexes, or other additions that do not require demolition of an existing home on a given lot or parcel of land;
- Incentivizing the development of single-room occupancy multifamily housing and ADUs;
- Not using minimum lot sizes or minimum square foot requirements, and allowing increased floor area ratios;
- Incentivizing turning commercial property into residential housing;
- Eliminating or lowering parking requirements;
- Eliminating or raising height limits for development; and
- Waiving or eliminating fees for development in exchange for a larger number of units developed that would be affordable to low-income people.
- Permanently Reauthorizing the Multi-Family Preservation and Revitalization (MPR) program and Rural Housing Investments: The DASH Act would require the Department of Agriculture (USDA) to implement a program for the preservation and revitalization of housing projects that are financed with USDA loans, including by restructuring existing loans. The bill would also require USDA to offer to renew a property owner’s contract for rental assistance payments for a term of 20 years, provided that the property owner agrees to maintain the property as decent, safe, and sanitary housing for the full term of the contract. Under the bill, USDA would provide technical assistance grants to qualified nonprofit organizations and public housing agencies to help borrowers acquire multifamily rental-housing properties in areas where there is a risk of loss of affordable housing, Further, USDA may provide rural housing vouchers for low-income households (including those not receiving rental assistance) residing in certain properties financed with or insured by USDA loans. The DASH Act authorizes $250 million for ten years to pay increased rental assistance to low-income Americans in rural areas. The bill also extends existing housing protections for victims of domestic violence, dating violence, sexual assault, and stalking to victims who receive rural housing voucher assistance. These protections include protections against denial or termination of assistance or eviction. The DASH Act would also invest in programs to increase and preserve the supply of available and affordable rental housing for low-income Americans living in rural areas and for domestic farm laborers. These programs include the Rural Housing Assistance program (Sec. 504), the Farm Labor Housing loan program (Sec. 514), the Rural Development program (Sec. 515), and the Farm Labor Housing grant program (Sec. 516).
- Protecting and Expanding LIHTC: The DASH Act seeks to increase the production of affordable housing by strengthening the Low-Income Housing Tax Credit (LIHTC) to preserve and protecting current LIHTC properties, while dramatically expanding production. This includes several provisions from the Affordable Housing Credit Improvement Act:
- Increasing the 9 percent Housing Credit tax incentive by 50 percent, which would finance an estimated 299,000 additional affordable rental homes over 2021-2030;
- Lowering the bond financing requirement for properties to receive the full 4 percent credit from 50 percent to 25 percent for four years, allowing states to more efficiently and effectively use their bond cap authority to build additional affordable housing; and
- Providing additional upfront equity for certain projects, including those in rural, Native American, and Extremely Low-Income communities, or for bond-financed properties that receive the lesser, 4 percent Housing Credit.
- Preserving tens of thousands of affordable housing units by curtailing the use of Qualified Contracts, repealing the option going forward and changing the formula that determines purchase price on existing properties.
- Creating a Middle-Income Housing Tax Credit: The bill would create a new Middle Income Housing Tax Credit to provide a tax credit to developers who house tenants between 60 and 100% of area median income. The credit would equal 50% of the present value of construction costs, or 5% per year on an undiscounted basis. States would administer the program, and Treasury would annually allocate the credit to states based on a $1 per capita formula with a $1.14 million small state minimum. States would also be allowed to use Middle Income Housing Tax Credit dollars to augment their LIHTC program. To qualify for the credit, a rental property would need to meet two affordability standards: 1) a property would have to include a minimum percentage of affordable units; and 2) rents for those units could not exceed maximum amounts based on average incomes in the area. Specifically, at least 60 percent of the property’s units must be occupied by individuals with incomes of 100 percent or less of Area Median Gross Income (AMGI). Furthermore, tenants’ rents would not be able to exceed 30 percent of 100 percent of AMGI. The affordability restrictions would remain in place for up to 15 years after the compliance period. Credits are discontinued to the developer if a project fails to meet these income/rent requirements. States could also use the Middle-Income Housing Tax Credit dollars to augment their LIHTC program.
- Creating a Renter’s Tax Credit: The legislation would also create a Renter’s Tax Credit, a refundable credit claimable by taxpayers who own and operate affordable housing. The Renter’s Tax Credit would provide a refundable tax credit to property owners who rent to eligible tenants with incomes at or below 30% of area median income. The credit would equal up to 110% of the difference between market rent and utilities and 30% of the tenant’s income. Each year, Treasury would allocate renters’ credits to states through a per capita formula and states in turn would allocate their credits to participating property owners who have signed a binding rent reduction agreement with eligible tenants. A state’s unused credits would be returned to the national pool and participating property owners would have to comply with the Fair Housing Act.
- Providing a Down Payment Tax Credit for First-Time Homebuyers. To help moderate-income families seeking to purchase their first home, the DASH Act would provide a new $15,000 first-time home buyer tax credit, which would be fully refundable and equal to 20% of the purchase price of a home. The credit would phase out above 110% of conforming loan limits and above $100,000 of income for single filers ($200,000 for joint filers). The credit could also be recaptured if the taxpayer re-sells the home in under five years.
Looking ahead, the House will return from its summer recess on August 23 to consider providing $3.5 trillion in new spending for social programs and $1 trillion for roads, bridges, and rails. It is expected that some of the provisions of the DASH Act will be included in a final compromise bill.
To view a section-by-section summary of the DASH Act, click here. To view the Senate Finance Committee’s press release, click here