House passes bill boosting low-income housing tax credits

With overwhelming bi-partisan support, the House of Representatives passed a tax reform bill that would restore higher limits for the low-income housing tax credit program.

H.R. 7024, the Tax Relief for American Families and Workers Act of 2024, was approved on a 357 to 70 vote, including 188 Democrats and 169 Republicans supporting the legislation.

If the U.S. Senate agrees, the bill would restore a 12.5% increase to the 9% state limit on allocation of LITHCs that expired at the end of 2021. The cap is independent of a limitation that the Federal Housing Finance Agency has imposed on Fannie Mae and Freddie Mac for LIHTCs.

A new program from New York City, noting the limits on LIHTCs, is designed to combine public and private financing instead.

Supporters cheered the bill's passage, but some called it a handout for corporations, including Rep. Pramila Jayapal, D.-Washington, who voted in favor of the bill.

"I'm disappointed that my Republican colleagues were unwilling to give this much-needed relief without tying it dollar-for-dollar to tax breaks for the largest corporations," Jayapal said in a press release. "They should not be selling out working families to pad their donor's wallets."

For her home state, the plan would add 6.890 affordable housing units, but Jayapal felt more could have been done. 

"As Washington State grapples with a shortage of more than 170,000 affordable housing units, this package was a missed opportunity to support new permanent housing for people experiencing homelessness and other extremely low-income households through LIHTC," Jayapal said. 

The housing industry was unequivocally in favor of H.R. 7024.

"Rental housing providers strongly support this bill that takes an essential step toward addressing our nation's housing affordability crisis and addressing critical provisions impacting investment," a statement from the National Multifamily Housing Council read. "We hope the Senate will pass it expeditiously."

The Mortgage Bankers Association previously expressed support for the bill on the day the House Ways and Means Committee met for markup.

"MBA is pleased the House has passed this bipartisan bill that increases the availability of Low-Income Housing Tax Credits," President and CEO Bob Broeksmit said in a statement. "The enhancements to the LIHTC program will improve the supply and affordably challenges in the rental market by producing an estimated 200,000 additional rental units over the next two years."

The Affordable Housing Tax Credit Coalition said the change would make "the most meaningful dent" in the creation of affordable housing in over 20 years.

"The affordable housing community is ready to get to work to build and preserve more sorely needed affordable rental homes for America's low-income families and seniors," said Ryan Sfreddo, president of the organization and CEO of Red Stone Equity Partners, in an online posting. "We are thrilled to see the House advance common-sense proposals to address our nation's acute affordable housing crisis through an expansion of the Low-Income Housing Tax Credit, a proven public-private partnership model with a 37-year track record of success."