ACTION Releases Updated 4 Percent Housing Credit Fact Sheets
The ACTION Campaign has released an updated national 4 percent Housing Credit fact sheet, as well as state fact sheets for the 21 states and the District of Columbia, which would receive the most additional homes from enacting a minimum 4 percent Housing Credit rate.
Today, the 4 percent Housing Credit finances about half of the annual affordable rental housing produced or preserved with the Housing Credit program. However, the 4 percent Housing Credit is much lower than Congress originally intended because the 4 percent Housing Credit rate fluctuates monthly based on a formula tied to federal borrowing rates, which are now effectively at 0 percent. The “4 percent” Housing Credit rate will reach an all-time low of 3.07 percent in June. The precipitous drop in rate is jeopardizing thousands of affordable homes already underway by creating significant unforeseen financing gaps.
Enacting a minimum 4 percent Housing Credit rate is a top priority of the ACTION Campaign, and we urge Congress to include it in the next coronavirus response package. A minimum 4 percent Housing Credit rate will make more developments financially feasible in light of the historically low rate. Doing so would also 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. According to recent analysis by Novogradac, a minimum 4 percent Housing Credit rate could finance nearly 126,000 additional affordable rental homes over 2020-2029. These additional affordable homes are critical given the economic uncertainty and constraints many families face in light of the crisis.
Advocates can use these fact sheets to demonstrate to Members of Congress how critical the 4 percent Housing Credit is in financing the development and preservation of affordable housing in her/his/their state and the estimated additional affordable homes that enacting a minimum 4 percent Housing Credit rate would provide. The updated 4 percent Housing Credit fact sheets include the following information:
- Number of affordable homes financed using the 4 percent Housing Credit during 1986-2018
- Estimated number of low-income households served by those units
- Estimated number of jobs supported for one year as a result of those units
- Estimated amount of tax revenue generated as a result of those units
- Estimated amount of wages and business income generated as a result of those units
- Estimated number of additional affordable homes that could be built during 2020-2029 with the enactment of minimum 4 percent Housing Credit rate
Access the fact sheets here:
To learn more about the data sources and methodology for the 4 percent Housing Credit fact sheets, click here.
Senate Finance Committee Ranking Member Ron Wyden Releases Affordable Housing Priorities, Including Minimum 4 Percent Housing Credit Rate
On May 22, Senate Finance Committee Ranking Member Ron Wyden (D-OR) released an outline of affordable housing priorities he will pursue in the next coronavirus response bill. The six priorities are focused on preserving and expanding affordable housing and, in particular, on supporting Housing Credit properties.
Notably, Ranking Member Wyden’s priorities to expand incentives for new production include the ACTION Campaign’s priorities to enact a minimum 4 percent Housing Credit rate and to enact basis boosts for bond-financed projects and developments in rural and Indian areas – all of which are also provisions in the Affordable Housing Credit Improvement Act, of which the Senator is an original cosponsor.
ACTION Mayor Sign-on Letter Deadline Extended to Friday, May 29
The deadline for mayors to sign-on to a letter being ciruclated by the Seattle Office of the Mayor and the ACTION Campaign, which calls on Members of Congress to include provisions that support the Housing Credit in the next COVID-19 response package, has been extended to this Friday, May 29.
Thank you to the Housing Credit advocates who have helped add mayors to the letter, and please continue to ask your mayor to sign-on by the deadline this Friday, May 29. Click here to read the letter and click here to sign-on.