NAHB, as part of the A Call To Invest in Our Neighborhoods (ACTION) Coalition, sent to congressional leaders a letter urging them to stabilize the affordable housing system by including provisions to support the Low-Income Housing Tax Credit (LIHTC) and mitigate the damage to affordable housing production that is already occurring as a result of the COVID-19 crisis.
There is a severe shortage of affordable rental housing in the United States, and the COVID-19 pandemic has only exacerbated this growing crisis. The need to keep affordable housing production moving forward is even greater with more than 30 million individuals and counting who have lost their jobs, while one in four renters were already struggling paying more than 50% of their income in rent prior to the pandemic.
The coalition requests the following for the next relief package:
- Enact a minimum 4% housing credit rate.
- Lower the “50% test” bond financing threshold for 4% Housing Credit developments
Fiscal policies pursued by the government to stabilize the economy have driven the 4% credit rate down to all-time lows. For April, the rate was 3.12%; for May, the rate is now 3.08%, breaking the record low set in April. This is an unprecedented drop and direct consequence of COVID-19. And this record-low rate is unlikely to change in the short term, which is why relief is needed.
Going forward, the coalition has also requested the Congress explore increasing the annual housing credit allocation by 50%, and providing additional basis boosts for vulnerable properties impacted by COVID-19, including housing bond-financed properties that have felt the financing crisis most acutely.
The full coalition letter is available on nahb.org.
For more information, contact J.P. Delmore.