Senate Finance Committee Holds Hearing on Affordable Housing
As tax reform comes into focus in Congress, debates emerged among legislators on the Senate Finance Committee regarding housing tax policy – including the preservation of the Low-Income Housing Tax Credit (LIHTC) and how changes to the corporate tax rate could impact investments in housing credit developments. This week, the Senate Finance Committee held a hearing on “
America’s Affordable Housing Crisis: Challenges and Solutions.” In a bipartisan show of support for affordable housing, members of the Committee from both sides of the aisle acknowledged the need for more affordable housing and the vital role of the LIHTC as our nation’s primary tool for increasing the supply of affordable rental housing.
The Affordable Housing Credit Improvement Act (
S. 548) – which aims to improve the LIHTC through policy changes such as income averaging and expanded credit allocations – featured prominently in the discussion, and there were many comments from witnesses as well as members of the Committee about the need to strengthen the LITHC. S. 548 currently has 20 Senate co-sponsors, including seven members of the Finance Committee; companion legislation in the House has earned over 80 co-sponsors.
The following witnesses testified at the affordable housing hearing:
- Daniel Garcia-Diaz, Director, Financial Markets and Community Investment, United States Government Accountability Office (GAO). Garcia-Diaz’s testimony focused on the three GAO reports issued on the Housing Credit over the past three years, which reviewed issues of federal administration, state administration and the role of syndicators.
- Grant Whitaker, President and CEO of the Utah Housing Corporation and President of the National Council of State Housing Agencies (NCSHA). Whitaker’s testimony described the scale of the affordable housing crisis and the role of the Housing Credit and Housing Bonds in addressing it, citing specific examples of these programs’ success in helping to house veterans and chronically homeless individuals in Utah.
- The Honorable Kathy O’Regan, PhD, Professor of Public Policy and Planning at the Furman Center and former Assistant Secretary for the HUD Office of Policy Development and Research. O’Regan’s testimony focused on the increasing number of households experiencing high cost burden, especially among the lowest income renters. She argued that now is an “opportune time to make substantive improvements” to the Housing Credit.
- Kirk McClure, PhD, Professor of Urban Planning at the University of Kansas. McClure’s testimony acknowledged that the Housing Credit is “a good program” but suggested several reforms to promote the use of market studies to ensure that developments are sited in locations with the greatest need, to allow state housing finance agencies to exchange Housing Credit authority for voucher authority, to encourage rehabilitation over new construction, and to promote mixed-income developments.
- Granger MacDonald, Chairman of the Board of the National Association of Home Builders (NAHB). MacDonald’s testimony stated that “housing affordability has reached crisis proportions,” and that the first step to addressing the crisis is to pass S. 548.
The affordable housing hearing was well-attended by Senators on the Finance Committee. In his opening statement, Senate Finance Committee Chairman Orrin Hatch (R-UT), lead Republican sponsor of the Affordable Housing Credit Improvement Act, described the affordable housing crisis as “a problem that should be ready for a bipartisan solution,” and throughout the hearing expressed support for S. 548 as an important step to make a meaningful dent in the affordable housing crisis.
Senate Finance Committee Ranking Member Ron Wyden’s (D-OR) opening statement reaffirmed his support for S. 548 and called on the committee to pursue bipartisanship both in advancing this bill and in tax reform more broadly. In her remarks, Senator Maria Cantwell (D-WA), lead sponsor of the Affordable Housing Credit Improvement Act, highlighted the role of the Housing Credit in serving urban as well as rural communities, and responding to specific needs, such as veteran homelessness. Senator Cantwell also underscored the high costs of housing inaction on the health and criminal justice systems, among others.
NAHMA strongly supports efforts to expand and improve the Housing Credit, such as through the legislative provisions proposed by Senators Cantwell and Hatch. We will continue to advocate on its behalf. In addition, NAHMA will submit testimony for the hearing record, in support of LIHTC, to the Committee.
HUD Assistance Secretaries Confirmed by Senate
This week, the Senate approved a long list of administration nominees before leaving town for their August Recess. Confirmed positions include
Ms. Anna M. Farias, of Texas, to be HUD’s Assistant Secretary for Fair Housing and Equal Opportunity; and
Mr. Neal J. Rackleff, also of Texas, to be HUD’s Assistant Secretary for Community Planning and Development. Additionally, tax consultant
David Kautter was confirmed as Assistant Secretary of the Treasure for tax policy, a position that will be key in the administration’s push for tax reform.
Housing Accountability Act reintroduced in the House
On July 28, 2017, Representatives Dennis Ross (R-FL) and Steve Cohen (D-TN) revived legislation from last year that would “provide standards for physical conditions and management of housing receiving assistance payments under Section 8.” The bipartisan legislation was originally introduced by Florida Senators last year in response to a well-publicized Section 8 housing
scandal.
The Housing Accountability Act (
H.R. 3575), which mirrors the Senate
bill that was also reintroduced this year, aims to establish direct communication between HUD and residents of subsidized housing by requiring a semi-annual tenant survey on living conditions and management performance. Penalties assessed on the property owners for repeatedly ‘failing’ the survey would go toward property remediation or tenant relocation efforts.
Neither the House nor Senate version of the legislation has gained additional cosponsors at this time, and markup hearings have not been scheduled. NAHMA opposes this legislation and will continue to monitor its movement in both chambers.
