Senators Introduce Legislation to Establish Low-Income Renters Tax Credit
Last week, Senators Ron Wyden (D-OR) and Sherrod Brown (D-OH), introduced, the Renters Tax Credit Act of 2021 (S.2554), legislation to establish a renters tax credit for low-income households. In a Sen. Wyden’s press release, it states this legislation would:
- Authorize states to allocate a capped amount of renters credits to owners or developers of rental housing for a credit period of up to 15 years
Owners of renters credit units would be required to rent them to families with incomes below the federal poverty line, or 30 percent of the local median income at the time they move in. If a household’s income later rises, the family would not be required to leave the unit.
- Require tenants pay no more than 30 percent of their income for rent and utilities – much lower than the usual share of rent to income many low-income families are forced to pay to keep a roof over their heads
The building owner would receive a tax credit based on the gap between the tenant payment and the market rent, up to a cap reflecting typical rents in the local area. These credits would be refundable, allowing non-profits and other owners with limited income tax liability to claim the credits directly.
- Enable landlords to use the credit in buildings that also have low-income housing tax credit (LIHTC) allocations — making it easier to reduce rents for some units to levels low-income families can afford — or separately in non-LIHTC buildings
States would be required to set aside some credits for buildings owned by qualified non-profits and for projects in rural areas. To encourage mixed-income housing, states could allocate credits to no more than 25 units or 40 percent of units in a project, unless the project previously had federal rental assistance for a larger number of units.
NAHMA will work with our Federal Affairs and Tax Credit Committees to adopt a policy position on this legislation. Both Senators are fierce advocates for affordable housing. Both also lead respective housing oversight committees, Senate Banking and Senate Finance.
Senate Nears Passage of Bipartisan Infrastructure Bill
The Senate continues hammering out the final details of $1 trillion bipartisan infrastructure proposal, currently voting on a string of amendments. Senate Majority Leader, Chuck Schumer (D-NY) has indicated he wants to pass the bill as early as this weekend. The infrastructure bill includes $550 billion in new spending on transportation, broadband and utility systems but does not contain any funding for affordable housing. Assuming the Senate infrastructure bill passes, the Senate will immediately begin debate on the $3.5 trillion budget resolution. The budget resolution reportedly contains at least $200 billion for housing programs ,including tax subsidies, community investment options and a strong possibility of voucher expansion and increased funding for construction/repairs). The budget resolution only requires a simple majority of 50 votes to pass the Senate and is expected to pass the full Senate late next week. Once the budget bill has passed the Senate, Democrats will put the major aspects of the budget bill into a reconciliation bill, which expedites the legislative process by limiting debate and amendments, prevents a filibuster, and only requires a simple 50 vote majority to pass. The reconciliation bill will include most of the social portions of President Biden’s agenda, including substantial investments in affordable housing and it will be the number one priority for the House, Senate and White House. Therefore, Majority Leader Schumer plans to pass both the infrastructure legislation and a budget resolution that sets the stage for a Democratic budget reconciliation plan before the Senate leaves for its August recess.
Senate Appropriations Committee Passes FY22 USDA Funding Bill
On Thursday, the Senate Appropriations Committee passed the fiscal year 2022 (FY22) appropriations bill for the Department of Agriculture and Food and Drug Administration, for a total funding level of $25.855 billion. This represents an increase of $2.5 billion over fiscal year 2021 (FY21) enacted levels but lower than the House proposal of $26.55 billion . A total of $1.45 billion is provided for Section 521 rental assistance and rental vouchers for affordable rental housing for low-income families and the elderly in rural communities to renew all existing rental assistance contracts. This represents an increase of $40 million from FY21 levels but is still lower than the $1.495 billion proposed by the House. $250 million is provided for Section 538 Multifamily Guaranteed Loans ($20 million above the House proposal) and $92 million for Section 515 Multifamily Direct Loans ($52 million above the House proposal). While the House bill proposed $60 million in funding for the Multifamily Preservation and Revitalization program (MPR) the Senate bill only provides $32 million for MPR, while substantially increasing Section 515 funding. For Section 542, both the Senate and House proposals provide an equal amount of $45 million. The Senate and House would also both keep provisions calling for incentives to nonprofits to preserve rental housing, reuse of recaptured rental assistance, and use of recaptured rental assistance from farmworker housing in other farmworker housing, when possible, although those were left out of the administration’s budget request. The Senate bill, however, retains a provision in FY21 appropriations law, dropped by the Biden Administration’s budget and the House, that allows rental property owners to request 20-year terms for Rental Assistance contracts, subject to annual appropriations. The Senate bill would also provide. The Senate bill would also provide $700 million for the ReConnect broadband program to expand access to high-speed broadband to remote unserved and under-served rural areas. This is especially important as our country continues to navigate the pandemic and when many families continue to rely on broadband for communication, work, and school. The bill also provides $665 million for water and wastewater disposal grants, an increase of $44 million as compared to fiscal year 2021. This funding is expected to fund 700 grants to ensure communities have reliable drinking water systems, and sanitary and solid waste disposal. A final vote in the Senate on the appropriations bill is not expected until after the August recess.
The full bill text is located here and a summary of the bill can be found here.
To view a statement on the bill’s passage from the Senate Appropriations Committee Chairman, Sen. Patrick Leahy (D-VT), click here.