Senate reveals vision for tax reform; House version passes through Committee without 4% credits
In a whirlwind week for tax reform, the House and Senate considered separate versions of legislation to overhaul the nation’s tax code. The Senate Finance Committee released only a brief “vision” of its bill on Thursday, with further legislation forthcoming.
Although both House and Senate tax reform plans preserve the Low-Income Housing Tax Credit (LIHTC), the
House bill eliminates private activity bonds (PABs) and the associated 4% credits. Paired with the lowered corporate rate, elimination of the PABs could devastate affordable housing with a production cut of up to two-thirds annually.
In response to immense industry pressure to protect affordable housing in the tax rewrite, the House Committee considered an amendment by Representative Suzan DelBene (D-WA) to increase the cap on allocated LIHTCs by 50% over 5 years and restore PAB authority. The amendment was later defeated on a party-line vote, despite bipartisan expressions of support for affordable housing, but some lawmakers suggested restoring PAB with curtailed uses later in the legislative process.
Both titled “The Tax Cut and Job Act,” the House and Senate bills share some common features, such as lowering the corporate rate to 20%, overhauling tax credits and deductions, and restructuring the individual income tax brackets; however, crucial differences between the bills set up a potential battle as the Republican-led Congress comes under pressure to deliver a “win” before the holidays. Both pieces of legislation are expected to be significantly amended in the coming weeks.
Please see NAHMA’s recent
grassroots alert to reach out to your House Representatives with the urgent message to protect affordable housing, and please stay tuned for more advocacy updates on the Senate bill.
Family Self-Sufficiency companion legislation introduced in House
This week, Representatives Sean Duffy (R-WI) and Emanuel Cleaver (D-MO) introduced a House version of the Senate’s “Family Self-Sufficiency Act,” which was introduced in June to streamline and expand HUD’s Family Self Sufficiency (FSS) program.
Like the bipartisan
Senate bill, H.R. 4258 would relieve some regulatory burden to administer the FSS program by combining HUD’s separate FSS programs into one; the bills also seek to broaden the supportive services provided to participants and expand access to project-based tenants. However, the House bill omits a Senate provision to authorize $1 million per fiscal year from 2018-2022 for the program.
The House Financial Service Subcommittee on Housing and Insurance, which is Chaired by Representatives Duffy and Cleaver, recently held a
hearing on HUD’s FSS program during which witnesses emphasized the program’s potential and the need for more federal funding. The full Committee plans to
mark up the bill next week.
HUD’s FSS program has been in place for 25 years and assists families in leveraging increased earnings to build self-sufficiency. A NAHMAnalysis about the HUD program and legislation is forthcoming.
House Committee continues housing finance reform debate
In the third hearing so far this year, a House Financial Services Subcommittee heard testimony this week to further assess views and perspectives on sustainable housing finance reform. Witnesses included Peter Wallison from the American Enterprise Institute; Dr. Mark Zandi from Moody’s Analytics; Alanna McCargo from the Urban Institute; and the Honorable Theodore Tozer from the Milken Institute.
In his opening statement, Subcommittee Chairman Sean Duffy (R-WI) said, “Any new housing finance reform system should promote affordability, choice, and innovation…Any reform must be based on market discipline. We cannot leave the taxpayers responsible for digging this nation out of another hole because of the risky bets the previous housing finance system enabled stakeholders to make.”
Lawmakers from both sides of the aisle have called for reform of the Government Sponsored Enterprises (GSEs), which were placed under federal conservatorship in response to the financial crisis of 2008, ahead of a looming fiscal deadline at the end of this calendar year.
“The current housing finance system has remained in a state of uncertainty for far too long, and the work of this Congress to return confidence, trust, and stability to the system will go a long way in restoring housing credit markets, stabilizing regulation, and reestablishing a well-functioning housing finance system in the United States. One clear lesson from recent years is that the country needs one solid, interconnected housing finance system that serves all people and protects taxpayers,” said Ms. McCargo.
A recording of this week’s hearing is available
here.
Florida, California, and New York Senators introduced disaster housing legislation
In response to devastation from hurricanes and wildfire this year, Senators from impacted states introduced legislation to provide housing and Medicaid assistance to families affected by a major disaster. Titled the “Disaster Displacement Act of 2017,”
S. 2066 provides additional funding to HUD’s Housing Choice Voucher (HCV) program to help low-income evacuees to access affordable housing under the voucher program.
According to a
press release by Senator Nelson (D-FL), the lead sponsor on the bill, disaster evacuees earning less than 50% of Area Median Income would be eligible to receive assistance for affordable housing. Following approval of their applications, voucher holders would be able to rent a unit from the private market at 30% of adjusted income.
Senator Nelson said the legislation will “help make more affordable housing in the communities that need it the most.” The bill, cosponsored by California Senator Kamala Harris and New York Senator Kirsten Gillibrand, heads to the Senate Finance Committee for consideration. NAHMA will continue to monitor this legislation.
