White House and Congress Near Deal on Debt Limit and Government Funding
Ahead of the holiday weekend, details of a bipartisan agreement between the White House and Congress are beginning to leak to media outlets. Some notable details include: An agreement to lift the nation’s debt limit through 2024 (beyond the 2024 November elections); a provision to incentivize Congress to pass all 12 spending bills to fund the government; and recapturing unspent pandemic relief funding. Other items still under negotiation include work requirements for certain safety net programs and overhaul of utility permitting regulations.
Treasury Secretary Janet Yellen has warned that June 1st is the earliest that the country is at risk of defaulting. The expectation is that an agreement will be reached later today or this weekend (likely Saturday). Once a deal is announced, it will take congressional staff one or two days to convert the agreement into legislative text. House Republicans remain committed to waiting 72 hours once the legislation is finalized, before any voting on it can take place. This allows lawmakers to read the bill and was a concession by House Speaker Kevin McCarthy (R-CA) to win the leadership position. To avoid next Thursday’s default date, a bill must pass the House of Representatives and avoid any delays in passage by the U.S. Senate.
Housing Affordability Coalition Urges Congress to Advance Housing Policy Solutions
This week, NAHMA and 18 national real estate associations joined forces, under the Housing Affordability Coalition and sent a letter to Congress pass legislation to increase the supply of housing. The Coalition’s statement is available below:
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Specifically, the coalition recommend that lawmakers immediately act on the following legislation that would address the housing affordability crisis and increase the nation’s housing supply:
- Yes In My Back Yard (YIMBY) Act: Bipartisan legislation sponsored by Sens. Todd Young (R-IN) and Brian Schatz (D-HI) in the Senate (S. 1688) and Reps. Derek Kilmer (D-WA) and Mike Flood (R-NE) in the House of Representatives (H.R. 3507) that would help eliminate discriminatory land use policies and remove barriers that depress production of housing in the United States. By requiring Community Development Block Grant (CDBG) recipients to report periodically on the extent to which they are removing discriminatory land use policies, and promoting inclusive and affordable housing, the YIMBY Act will increase transparency and encourage more thoughtful and inclusive development practices.
- Eliminate Exclusionary Zoning and Harmful Land Use Policies: For decades, exclusionary zoning laws – like minimum lot sizes, mandatory parking requirements, and prohibitions on multifamily and manufactured housing – have inflated housing and construction costs and locked families out of areas with more opportunities. President Biden included an innovative, new competitive grant program in his Housing Supply Action plan called the Unlocking Possibilities Program that would award flexible and attractive funding to jurisdictions that take concrete steps to eliminate such needless barriers to producing affordable housing.
- Promote Affordable Housing Near Transit Act: Sponsored by Rep. Adam Smith (D-WA), the bill would permit transit agencies to convey land at zero cost to non-profit affordable housing developers or other eligible third-party entities, such as multifamily developers, to produce affordable and mixed-income housing. The bill has yet to be reintroduced in the 118th Congress.
- Build More Housing Near Transit Act: Bipartisan legislation led by Reps. Scott Peters (D-CA) and McMorris Rodgers (R-WA) that would better leverage federal transportation dollars to support housing development. The bill has not been reintroduced in the 118th Congress.
- The Choice in Affordable Housing Act: Bipartisan and bicameral legislation introduced by Sen. Chris Coons (D-DE) and Kevin Cramer (R-ND) and soon to be introduced by Rep. Emmanuel Cleaver, II (D-MO), this bill enjoys the backing from both housing advocates and housing providers, and would address many overlapping and redundant programmatic procedures that have deterred professional owners and operators from participating in the Section 8 Housing Choice Voucher Program.
- Housing Supply and Affordability Act: Legislation sponsored by Sen. Amy Klobuchar (D-MN) in the Senate and Rep. Lisa Blunt Rochester (D-DE) in the House that would create a new Local Housing Policy Grant (LHPG) program at HUD to provide grants to local governments to support efforts to expand housing supply. The bill has not been reintroduced in the 118th Congress.
The coalition also encouraged Congress consider the following tax proposals:
- Low-Income Housing Tax Credit (LIHTC): Expanding and enhancing the LIHTC will enable greater production of affordable housing. We support the bipartisan and bicameral Affordable Housing Credit Improvement Act (H.R. 3238 and S. 1557), which was introduced under the leadership of Sens. Cantwell (D-WA), Young (R-IN), Wyden (D-OR), and Blackburn (R-TN), and Reps. LaHood (R-IL), DelBene (D-WA), Wenstrup (R-OH), Beyer (D-VA), Tenney (R-NY), and Panetta (D-CA).
- Enact the Middle-Income Housing Tax Credit (MIHTC) to Support Workforce Housing: Housing affordability impacts the financial well-being of middle-income households in addition to low-income families. Congress should enact the Middle-Income Housing Tax Credit as included in the Decent, Affordable, Safe Housing for All Act (DASH Act) (S. 680) to address the shortage of workforce housing available to American households. Modeled on LIHTC, MIHTC takes over where LIHTC leaves off and is designed to benefit populations earning below 100 percent of area median income.
- Incentivize Adaptive Reuse of Underutilized Commercial Properties: Given the nation’s shortage of affordable rental housing, many are considering turning unused and underutilized commercial real estate structures, including offices, hotels, and retail spaces into housing. Not only would such repurposing help address the nation’s housing supply challenge, but it would also create jobs and boost local property tax revenues.
Sen. Stabenow, joined by Sen. Brown as a cosponsor, last Congress introduced the Revitalizing Downtowns Act (S. 2511) that would provide a 20 percent tax credit to convert office buildings into other uses, including residential use. This Congress, Rep. Gomez has introduced this legislation (H.R. 419) in the House of Representatives. The real estate industry is interested in working with Congress on this type of proposal but would like to see it modified to, among other things, enable other types of commercial properties (e.g., shopping centers and hotels) to qualify for the tax incentive; ensure REITs could utilize the benefit; and clarify that the credit does not reduce other tax benefits including the Low-Income Housing Tax Credit. - Enhance Opportunity Zones to Incentivize Rehabilitation of Housing Units: While we expect the Opportunity Zones program to be beneficial in spurring the production of new multifamily housing, it could be improved to also incentivize the rehabilitation of existing multifamily units. Statutory modifications could be made to reduce the basis increase necessary to qualify a multifamily rehabilitation project for Opportunity Zone purposes.
- Revitalizing Economies, Housing, and Businesses (REHAB) Act: Introduced last Congress by Rep. Earl Blumenauer (D-OR) and Rep. Darren LaHood (R-IL), this proposal would create incentives to encourage community development and neighborhood revitalization, as well as promote greater affordability in high-demand markets, through new private investment in multifamily buildings located near transit. The bill has not been reintroduced in the 118th Congress.
- Energy Efficient Qualified Improvement Property (E-QUIP) Act: Introduced last Congress by Reps. Brad Schneider (D-IL) and Tom Rice (R-SC), this Act would spur the replacement of aging building components that most impact building energy consumption, including heating and cooling systems; lighting; and building envelope components like roofs and windows by permitting accelerated depreciation of certain qualifying assets. The bill has not been reintroduced in the 118th Congress.