FROM THE ACTION Campaign
Correction: Please see the correct ACTION letter here.
Responding to the COVID-19 Crisis
First and foremost, we hope that everyone is taking care to stay healthy. Each day brings new developments, and we are all doing our best to navigate these unchartered waters. There are so many unexpected consequences stemming from the COVID-19 crisis, and that includes threats to the housing stability of millions of low-income Americans.
While the ACTION Campaign will always continue to advocate for the Affordable Housing Credit Improvement Act, we have to be rapidly adaptive and responsive as new challenges arise. As many of you know, the COVID-19 crisis and response measures may – and in some cases already have – result in consequential disruptions in transactions and construction for a variety of reasons including understaffed lenders, suspended site inspections, broken supply chains for materials, and local suspensions on construction. Congress is moving quickly to pass COVID-19 relief packages, and therefore we have to act swiftly to advocate for critical federal actions that can help the stability of the Housing Credit program.
With the help of many of our Steering Committee partners, we quickly identified and developed immediate statutory recommendations for Congress to include in the next COVID-19 relief package. The Housing Credit program has a number of programmatic deadlines required under the Internal Revenue Code that we expect could be difficult or impossible to meet as the pace of development is being slowed down. ACTION urges Congress to provide a one-year extension for three key program deadlines:
- 10 percent test deadlines. Currently, at least 10 percent of the anticipated basis of a development must be expended within one year of the Housing Credit allocation. We propose temporarily extending this deadline to the end of the second year of allocation for properties that received Housing Credit allocations between December 31, 2016 and January 1, 2022.
- Placed in service deadlines. Buildings must currently be placed in service by the end of the second year after the calendar year of the Housing Credit allocation. We proposed temporarily extending this deadline to the end of the third year after the calendar year of allocation for properties that received Housing Credit allocations between December 31, 2016 and January 1, 2022.
- Rehabilitation expenditure deadlines. These are currently required to be placed in service within 24 months. We propose temporarily extending the rehabilitation expenditures deadline to be met at the close of 36-months.
ACTION also recommends that Congress enact a minimum 4 percent Housing Credit rate to bolster future production and preservation of affordable housing. With federal borrowing rates effectively zeroed out in response to COVID-19’s economic impacts, the 4 percent Housing Credit rate is at an all-time low of 3.12 percent, and will likely dip even further next month. Enacting a minimum 4 percent Housing Credit rate would provide parity to the 9 percent Housing Credit rate, for which Congress enacted a minimum rate as part of the response to the 2008 economic collapse in recognition of the critical role of affordable housing in the recovery.
We have sent this ACTION letter to key Congressional offices, as we understand that drafting of the next relief package is well underway. We welcome you to echo these important statutory fixes.
We know the landscape is still changing, that new challenges will emerge, and that there are other important ideas being developed – and we encourage you to share them with us. We will be developing a longer list of statutory asks for future relief packages. We will also be developing a comprehensive list of regulatory asks for the IRS. If you have ideas to share, please email Sarah Brundage at sbrundage and Jennifer Schwartz at jschwartz.
As a reminder, ACTION’s next field call is scheduled for Friday, April 3, at 2 pm EST. We will keep you updated with major developments in the meantime. You can also find updates and resources at the following websites:
- NCSHA COVID-19 Resources and Updates
- Enterprise Blog Posts (Tax, Appropriations, State & Local)
- AHTCC Blog
- Novogradac COVID-19 Resources
- HUD Multifamily Housing
Please do not hesitate to reach out to us with other developments, concerns, questions, or suggestions.