Affordable Housing Crisis Necessitates Additional Investments in the Housing Credit

A recent article in The New York Times Upshot highlights the disconnect between the rising demand for affordable housing and the scarcity of the available resources across the country. Last fall, 6,580 households applied for 95 affordable units in the Natalie Gubb Commons development in San Francisco that were reserved for households earning up to 50 percent of the area median income. This translates to 70 applicants per unit, an overwhelming display of need for affordable rental housing. The Low-Income Housing Tax Credit (Housing Credit) serves the largest number of low-income renter households compared to other major housing assistance programs, but the reduction of the corporate tax rate from 35 to 21 percent in the Tax Cuts and Jobs Act of 2017 has reduced pricing and subsequent production under the Credit. The Affordable Housing Credit Improvement Act (S. 548), bipartisan legislation to strengthen and expand the Housing Credit, would enact a 50 percent increase in Housing Credit allocation authority, which would fully make up for the lost production resulting from tax reform.

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