URGENT – House Tax Bill Kills 4% Credits
Tell Congress to Address This Issue NOW
As you may have heard, while the proposed House Tax Bill retains the low income housing tax credit (LIHTC), it would eliminate private activity bond cap and thus by extension kill any future 4% bond LIHTC transactions. Many of us have utilized 4% credits on prior transactions to finance much needed affordable housing.
TAAHP is urging each of you and everyone else in your organization (your employees, their families and your residents) to contact any member of the House of the Representatives in whose district you may have built/renovated a housing project using 4% credits, as well as the member of Congress that represents your home district, to urge them to fix this issue in the tax bill when it comes to the floor. In the case that this issue is not addressed, please encourage your elected officials to oppose final passage of the bill.
In your communication to members of Congress, you may wish to note the following:
- While the proposed House Tax Reform Bill appears to retain the much needed low income housing tax credit (LIHTC) program created by President Reagan, unfortunately in its current form the bill proposes to eliminate the private activity tax exempt bond (PAB) program. Though perhaps unintentional, elimination of the PAB program also has the effect of eliminating the 4% low income housing tax credit (since 4% credits can only be awarded on projects that utilize PABs to finance at least 50% of the costs for projects using LIHTC – so no PAB, no 4% credits).
- Elimination of the PAB program will have dire consequences for the production of affordable housing overall which seems unthinkable in light of the hurricanes and fires that have devastated many parts of our nation over the last 90 days leading to the loss of tens of thousands of units. A rough estimate of the nationwide production of affordable housing over the last five years indicates that more than 70% of the projects financed include the use of TE bonds and 4% tax credits. The impact of the bill therefore would be to drastically cut the production of affordable housing by eliminating almost three-fourths of LIHTC units at a time when states like Texas already has one of the largest shortages of affordable housing units in the country.
- Therefore, we respectfully urge our Congressional Representatives to communicate to Ways and Means Committee Chairman Kevin Brady (R-TX) and Ranking Member Richard Neal (D-MA) the need to restore tax-exempt private activity Housing Bonds in the tax reform bill, H.R. 1. We understand Chairman Brady will be putting together over the next couple of days a Chairman’s Amendment that he will put before the Committee at the outset of the Monday, November 6th mark-up, proposing a limited number of changes to the bill. It is imperative to our industry and to further support the state’s housing needs that PAB is restored in that amendment.
You can find who represents you by entering your address here The Coalition also has a supply of housing advocacy postcards that can be used by your staff and residents to further stress the need to retain private activity bonds.
Thank you so much for your prompt action and your commitment to ensuring that our industry can continue to provide the affordable housing our country so desperately needs.