House Passes Tax Package with LIHTC Provisions, A Battle Awaits for Senate Passage
In a strong display of bipartisan support, the House of Representatives, this week, voted overwhelmingly in favor of the $78 billion Tax Relief for American Families and Workers Act, H.R. 7024, with a final tally of 357-70. If passed by Congress, the bill includes two LIHTC provisions that are NOVOGRADAC estimates will finance the production or preservation of over 200,000 additional affordable homes: (1) the reinstatement of the 12.5% increase to the 9% Credit from 2023 to 2025 and (2) a reduction in the Private Activity Bond (PAB) threshold from 50% to 30% for properties financed by PABs issued prior to 2026 and placed in service after December 31, 2023. With the bill now poised for consideration in the Senate, its fate hinges on forthcoming deliberations and discussions.
Despite receiving strong bipartisan support in the House, the timeline and process for Senate passage remain uncertain. Currently, the Senate is working on several significant legislative matters (govt. funding, immigration, & international conflicts) and no specific date for voting on the passage of the tax package has been set. We urge all NAHMA members contact Senators to emphasize the importance of LIHTC to ensure the swift enactment of these provisions. For those interested in further engagement and advocacy regarding Senate proceedings, the ACTION Campaign is a valuable resource. I am happy to assist, as well.
Lawmakers Release Bill to Reauthorize and Modernize the HOME Program
On January 23, Senator Catherine Cortez Masto (D-NV) along with Representatives John Garamendi (D-CA) and Joyce Beatty (D-OH) introduced the HOME Investment Partnerships Reauthorization and Improvement Act (S. 3644). Since its last reauthorization in the Housing and Community Development Act of 1992 (which lapsed in 1994), the HOME Program has undergone no significant changes in nearly three decades. The proposed legislation seeks to rectify this by:
- Authorizing $5 billion in HOME funding for FY24 and providing for a five percent annual funding increase through 2028, effectively elevating the program’s support levels beyond the 1994 authorization of $2.1 billion.
- Enhancing HOME’s capacity to offer downpayment assistance to homebuyers and home repair aid to homeowners.
- Enabling HOME funds to bolster Community Land Trusts and other shared equity homeownership initiatives.
- Expanding access to HOME funds for non-profit organizations and offering loan guarantee options to state and local governments, allowing them to leverage future HOME funds for present investments.
As a member of HOME coalition, NAHMA commends lawmakers for the reintroduction of this legislation, highlighting the HOME program crucial role in affordable housing. Advocacy for its consideration in the 118th Congress will remain a priority for NAHMA. For additional information, please see this press release issued by Senator Cortez Masto.
DOE Announces First Four State Applicants for Home Energy Rebates Program
Recently, the U.S. Department of Energy (DOE) announced the first four states to submit funding applications for the Home Energy Rebates program. California, Hawaii, New Mexico, and New York are leading the charge in this historic $8.8 billion investment initiative aimed at enhancing energy efficiency and electrification across the nation.
The Home Energy Rebates program is designed to help American families cut down their energy expenses by upgrading appliances, insulating homes, installing heat pumps, and implementing various energy-efficient improvements. The DOE estimates that this program will generate more than 50,000 jobs and save Americans $1 billion annually through reduced energy bills.
One of the program’s core objectives is to assist disadvantaged communities by requiring states and territories to allocate at least 50% of the rebates to low-income households, defined as those earning 80% or less of their area’s median income. Moreover, these states and territories must present plans to ensure that these investments create employment opportunities in communities that have long been marginalized.
Currently, the DOE is reviewing the applications from these states to ensure they meet the program’s guidelines. Once approved, the states will initiate their respective programs and begin accepting rebate applications from consumers.
About Home Energy Rebates (from DOE)
On Aug. 16, 2022, President Biden signed the landmark Inflation Reduction Act. The law includes nearly $400 billion to support clean energy and address climate change, including $8.8 billion in Home Energy Rebates, which will provide two separate rebates to consumers: The Home Efficiency Rebates will provide $4.3 billion to discount the price of energy-saving retrofits in single-family and multi-family buildings. These rebates will be administered by states and territories.
The Home Electrification and Appliance Rebates will provide $4.5 billion in rebates for high-efficiency electricity upgrades in homes. These rebates will be administered by states, territories, and Indian tribes. For more information, members can visit the Home Energy Rebates website.
Senate Subcommittee Explores the Impact of Artificial Intelligence on Housing
On Wednesday, Jan. 31st, the Senate Subcommittee on Housing, Transportation, and Community Development convened a hearing to discuss the implications of artificial intelligence (AI) on the housing sector. The hearing was chaired by Sen. Tina Smith (D-Minn.) and featured bipartisan engagement on the potential promises and threats posed by AI in the housing market.
Sen. Smith opened the hearing by emphasizing the critical role of housing in people’s lives, stating that without a safe and affordable place to live, many aspects of one’s life are affected, from jobs to education and health. She highlighted the bipartisan effort led by Senators Schumer, Rounds, Young, and Heinrich to explore the impacts, opportunities, and threats of AI, which has led to the Subcommittee’s focus on the intersection of AI and housing.
AI’s impact on housing was described as multifaceted. It extends from assisting individuals in finding housing resources to predicting eviction risks more accurately and understanding complex zoning laws. AI also plays a significant role in credit scoring models and automated valuation models, which determine the value of homes and consequently affect mortgage rates and homeownership prospects.
However, the Subcommittee acknowledged that while AI brings opportunities for efficiency and targeted services, it also carries substantial concerns. Examples of AI misuse were shared, including landlords using AI-generated tenant screening reports with incorrect or illegal information, and law firms allegedly automating eviction filings without proper review, leading to wrongful evictions.
Sen. Cynthia Lummis (R-Wyo.) expressed optimism about AI’s potential to improve access to housing, expedite housing development approvals, and address challenges in rural areas. She emphasized the importance of regulating AI responsibly to avoid overreaching and hindering innovation, referencing an overbroad SEC proposal in the financial sector.
The hearing featured three expert witnesses who shared their insights on AI and housing:
- Dr. Vanessa Perry, Interim Dean and Professor at the George Washington University School of Business, focusing on AI in mortgage finance and homeownership. Dr. Perry presented the “SCALE” framework, which focuses on S– societal values, C-contextual integrity, A-accuracy, L-legality, and E-expanded opportunity. This framework can guide regulations to ensure AI is used responsibly in housing.
- Lisa Rice, President and CEO of the National Fair Housing Alliance, advocating for fair AI practices to eliminate housing discrimination. Ms. Rice emphasized the need for AI systems to be fair, explainable, and trustworthy. She shared examples of AI discrimination in insurance and credit pricing and called for federal regulations that ensure fair and responsible AI practices in housing.
- Nicholas Schmidt: Founder and CTO of Solas AI, an expert in algorithmic fairness, Explainable AI, and model governance. Mr. Schmidt emphasized the human-centric nature of AI development, emphasizing the importance of human decisions in shaping AI algorithms. He proposed four key principles for AI regulation: fairness, transparency, accountability, and materiality, to balance innovation and safety.
The hearing concluded with a call for balanced regulations to harness AI’s potential benefits in housing while addressing its potential pitfalls. Senators expressed their commitment to developing policies that encourage innovation while safeguarding consumers and promoting equity in housing. Members can view this hearing HERE.