The Housing Advisory Group would like to bring two recent developments to your attention — the formation of House Republican Task Forces to develop a pro-growth agenda and the release of the Administration’s FY 2017 budget. Both contain items of interest to the affordable housing industry.
House Republican Task Forces
On February 4, 2016, House Republican leaders announced the formation of six task forces to develop a "bold, pro-growth agenda that will be presented to the country in the months ahead." The task forces are comprised of committee chairs of jurisdiction who will be seeking input from Members on national security; tax reform; reducing regulatory burdens; health care reform; poverty, opportunity, and upward mobility; and restoring constitutional authority.
We want to particularly bring to your attention the task force on tax reform and the task force on poverty, opportunity, and upward mobility. These are the two task forces that are likely to consider the Low-Income Housing Tax Credit as they develop their agendas. We will be reaching out to these task forces to make sure they are well aware of the LIHTC and its importance in providing affordable housing. This will give us another opportunity to urge Congress to protect and strengthen the credit. Because the task forces will be seeking input from their colleagues, it is critical that you continue the good work that you have been doing to show your elected officials the positive results the credit has produced in their Districts.
FY 2017 Budget
President Obama submitted his final budget to Congress on February 9, 2016, where it by and large was received with chilly indifference. In fact, House and Senate Budget Committee chairs declined to invite the President’s budget director to testify before their Committees. Nonetheless, the budget contains a number of important funding provisions for affordable housing, and it includes proposals to improve the Low-Income Housing Tax Credit (LIHTC).
The LIHTC provisions in the budget are largely the same as those in the Administration’s FY 2016 budget. The FY 2017 provisions are as follows:
- Allows conversion of private activity bond volume cap into additional LIHTC authority.
- Encourages mixed income occupancy by allowing income averaging in LIHTC properties.
- Adds furthering fair housing as an explicit allocation preference in QAPs. The addition of fair housing as an allocation preference is a new proposal.
- Adds preservation of publicly assisted affordable housing to the selection criteria for allocation.
- Removes the qualified census tracts (QCT) population cap, allowing HUD to designate as a QCT any census tract that meets certain criteria for the prevalence of poverty or low-income households.
- Implements the requirement that LIHTC-supported housing protect victims of domestic abuse.
With respect to funding for housing programs, the budget provides $48.9 billion in HUD gross discretionary budget authority, a 15 percent, increase over FY 2016. Significantly, it includes $11.3 billion in new mandatory spending over ten years focused on providing housing for the homeless. Other housing programs are funded as follows:
- $950 million in HOME funds, the 2016 enacted level.
- $10.8 billion for project-based rental assistance, an increase of almost $200 million.
- $200 million for the Choice Neighborhoods Initiative, an increase of $75 million.
- $2.88 billion for Community Development Fund Block Grants (CDBGs), a decrease of $180 million.
- $20.9 billion for the Tenant Based Rental Assistance program (TBRA), an increase of $1.2 billion.
- $50 million for the Rental Assistance Demonstration (RAD) program.
While the President’s budget is symbolic as the Congress determines spending levels, it is significant in setting priorities and proposing programs. We have been working with legislative leaders and staff on our LIHTC agenda and specific proposals and will keep you apprised of our progress on these issues.