The Senate returned from its Thanksgiving recess today with a total of 15 working days to accomplish major legislative priorities before the year’s end, including passing a comprehensive tax reform bill. Prior to leaving Washington, the Senate Finance Committee reported its version of the Tax Cuts and Jobs Act out of committee on a party-line vote of 14 – 12. The Senate is continuing negotiations and is expected to vote on a modified version of its bill later this week.
The House passed its version of the tax reform bill before adjourning by a vote of 227 – 205, with all Democrats and 13 Republicans voting against it. There are significant differences between the House and Senate bills, which can be resolved in two ways – either through a conference committee, or by having the House vote on the Senate-passed version of the bill in order to avoid a conference committee and finalize tax reform more expediently. At this point it is not yet clear which path the GOP will pursue, although a decision will likely be impacted by the outcome of the Senate’s vote later this week.
The Senate Finance Committee’s bill is markedly better for affordable housing and community development than the House bill: it retains the Low-Income Housing Tax Credit (Housing Credit); preserves the tax-exemption on multifamily Housing Bonds; adds several no-cost provisions, taken from the Cantwell-Hatch Affordable Housing Credit Improvement Act (S. 548), to strengthen the Housing Credit; and preserves the New Markets Tax Credit (NMTC) through 2019. However, no changes have been made that would address the impact of the lower corporate rate on the Housing Credit. Without this change, the Senate bill would reduce the future supply of affordable homes by over 200,000 units in the next decade. While the House bill would also retain the Housing Credit, it would eliminate both Housing Bonds and the NMTC, which would have a devastating effect on our ability to build and preserve affordable housing and revitalize distressed communities. Read more about the House and Senate bills on Enterprise’s blog.
Sustained advocacy as negotiations continue is critical. Terri Ludwig, president and CEO of Enterprise Community Partners, wrote in The Hill that Congress must sustain our affordable housing and community development ecosystem in tax reform. To do this, it is incumbent on all stakeholders to contact Republican representatives and urge them to preserve the Housing Credit, Housing Bonds and NMTC in any final tax reform bill, and make modifications to the Housing Credit to sustain its production potential under a reduced corporate tax rate environment. Visit the ACTION Campaign website for materials to advocate for the Housing Credit and Housing Bonds.