Cherrytree Group Blog

Election Year Bipartisanship in the Tax Credit World

[fa icon="calendar"] Jul 7, 2016 1:30:00 PM / by Warren Kirshenbaum

The Affordable Housing Credit Improvement Act, which was introduced on May 16, 2016, could aid almost four million households that lack affordable housing.

This legislation was introduced by Senators Maria Cantwell (D-WA) and Orrin Hatch (R-UT) and is unconventional due to its bold bipartisan support, as Hatch currently is the chair of the Senate Finance Committee. Chairmen seldom cosponsor tax legislation, especially when their counterparts hail from the opposing minority party. However, Hatch and Cantwell are displaying to their constituents their ability to rise above partisan politics, and in that way are showing that concerns with affordable housing are not party-specific.  It has been lost in our current political reality that our elected officials are public servants, and are above all, interested in serving the public interest and not legislating with an eye on re-election.  It is comforting to see politicians that will address an issue that serves the general public interest, and is not defined by a partisan platform, even if such support would be unpopular with their own constituents.  Is that not what the essence of public service is, in reality?

This particular bill includes several provisions for low-income housingtax credits(LIHTC), specifically calling for a fifty percent (50%) increase in allocation authority, a four percent (4%) minimum credit rate, and the addition of income-averaging in affordable developments. Respectively, these provisions would allow for an annual ten percent  (10%) expansion of allocations, an increase in the number of “financially feasible tax-exempt-bond-financed affordable housing developments”, and more available living opportunities for residents who make up to eighty percent (80%) of the area median income (AMI).  In terms of affordable housing, the 80% AMI tenant tends to be more of a workforce-housing person, which are in many cases first-responders, teachers, nurses, and other supportive professionals who will be able to live closer to where they work and, thereby provide more effective services to the communities they serve.

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With passage, the Affordable Housing Credit Improvement Act would change the way the LIHTC is viewed, making it more attractive in distressed areas due to its inclusion of a broader scope of financial backgrounds. However, this outcome is unlikely due to more pressing issues on the Senate floor to date, especially in an election year. Nevertheless, due to the bill’s bipartisan support, the legislation has already steered clear of “legislative purgatory”.

For important issues like a lack of affordable housing for families and individuals in need of such assistance, it is exemplary that lawmakers can forget their party-ties and collaborate for the welfare of the nation’s citizens.

 

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Topics: tax credit

Warren Kirshenbaum

Written by Warren Kirshenbaum

Warren is the President and CEO of the Cherrytree Group, a tax credit consulting, brokerage, and syndication firm.

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