Comments from our friends at Housing Advisory Group:
On Thursday, Speaker Paul Ryan (R-WI) and House Ways and Means Committee Chairman Kevin Brady (R-TX) unveiled their long-awaited tax reform plan. H.R. 1, the Tax Cuts and Jobs Act, delivers substantial tax cuts, including a significant reduction in the top corporate income tax rate. To offset the cost of the cuts, many current tax incentives are eliminated or substantially modified in the legislation. We wanted to bring to your attention the impact of the bill on affordable housing production.
H.R. 1 retains the Low-Income Housing Tax Credit, but it also eliminates the tax exemption for private activity bonds, which would have a devastating impact on the production of affordable housing. In addition, there are no modifications or enhancements to the credit that would help address the negative impact caused by lowering the top corporate rate to 20 percent. The proposal also eliminates the Historic Tax Credit and the New Markets Tax Credit. We appreciate the retention of the LIHTC, but are working quickly to educate Members of Congress regarding the bill’s overall impact on affordable housing.
Chairman Brady plans to mark up H.R. 1 beginning on Monday, November 6, and will be releasing his "Chairman’s mark," which will reflect additional changes to the initial bill. He also has indicated that members of the Ways and Committee will have an opportunity to offer amendments during the markup. We are working with the industry to urge Chairman Brady to address these critical housing issues in his mark, and ask that you reach out to your Representatives to request that they contact Chairman Brady regarding the restoration of private activity bonds for multi-family housing and addressing the impact of the reduced corporate rate on the credit.
On the Senate side, there are reports that the Finance Committee may have tax reform legislation ready to mark up by the week of November 13. This is an aggressive schedule and could slip, but work is ongoing to move as quickly as possible. Our Hill meetings with Senators and their staffs have been very positive, and we are hopeful the Finance Committee will retain and enhance the credit by including the Cantwell-Hatch Affordable Housing Credit Improvement Act (S. 548) in its tax reform proposal. We plan to circle back with our Senate supporters to let them know of our concerns with the House bill.
In addition to our work on tax reform, we continue to explore opportunities to add the Affordable Housing Credit Improvement Act to any other appropriate legislation (such as a disaster relief bill) that might be considered by Congress this year. The Housing Advisory Group recently signed an ACTION Campaign letter in support of this approach.
We also wanted to let you know that on October 31, Representative Suzan DelBene (D-WA) introduced H.R. 4185, legislation to increase the annual Housing Credit allocation authority by 50 percent. As you know, this proposal is the centerpiece of S. 548, the Cantwell-Hatch LIHTC legislation but was excluded from the Tiberi-Neal bill, H.R. 1661. Rep. DelBene was joined on her bill by Reps. Adam Smith (D-WA) and Pramila Jayapal (D-WA).
This process is just getting started so while it is vital that we continue our advocacy efforts to restore affordable housing resources in the Ways and Means proposal, there is much road ahead to travel before a final bill becomes law. Please let us know about your outreach efforts and we will keep you updated as the process moves forward.