Congress is in recess for the Thanksgiving holiday, but negotiations over a final fiscal year (FY) 2023 spending bill gained momentum last week and will continue among Appropriations Committee staff even as members return to their home districts and states. Congress has until December 16 to enact a final FY23 bill, pass another continuing resolution (CR) to keep the federal government funded, or risk a partial government shutdown. In additional to finalizing an FY23 omnibus, members of Congress are hoping to pass an end-of-the-year tax extenders package that may include an expansion of and reforms to the Low-Income Housing Tax Credit (LIHTC).
Senate Appropriations Chair Patrick Leahy (D-VT) and Ranking Member Richard Shelby (R-AL) will both retire at the end of the year and have each expressed determination to wrap up a final FY23 bill before they leave Capitol Hill. However, with Republicans slated to control the House next year, some far-right members in the House are pushing for a long-term CR that would delay the FY23 process into the new Congress, giving Republicans the opportunity to slash funding for social spending programs or bypass the FY23 bill altogether by enacting a long-term CR.
Long-term CRs have serious consequences for affordable housing and homelessness programs. Because the cost of housing rises every year, increased appropriations are needed from year-to-year just to maintain the number of households being served by HUD’s and USDA’s vital housing and homelessness programs. Flat funding acts as a cut and reduces the number of people served. The Campaign for Housing and Community Development Funding (CHCDF) sent a letter signed by 1,921 national, state, local, and tribal organizations to appropriations leaders on November 18 calling on Congress to provide the highest possible funding for HUD’s and USDA’s affordable housing, homelessness, and community development programs in FY23 and warning of the broad, negative impacts of long-term CRs on housing and homelessness programs.
In addition to finalizing an FY23 budget, Congress may enact a tax extenders package by the end of the year. NLIHC is urging policymakers to use the tax legislation to expand and reform the Low-Income Housing Tax Credit (LIHTC) to better serve extremely low-income (ELI) households, who have the most acute and urgent affordable housing needs. Congress regularly extends expiring tax provisions that are only authorized for a set number of years.
With a number of tax provisions up for extension at the end of this year, a tax extenders package represents the best opportunity currently available to expand and make needed legislative changes to the LIHTC program. NLIHC has released a fact sheet and call-to-action tool (see Memo, 10/31) focused on LIHTC reforms and is urging advocates to ask their members of Congress to include these reforms in an end-of-year tax extenders package.
Advocates should contact their members of Congress and urge them to support the highest possible level of funding for HUD’s and USDA’s affordable housing and homelessness programs in FY23, including significant funding for NLIHC’s top priorities:
- Full funding for the Tenant-Based Rental Assistance (TBRA) program to renew all existing contracts and expand housing vouchers to an additional 140,000 households.
- $5 billion for the Public Housing Capital Fund to preserve public housing, and $5.04 billion for the Public Housing Operating Fund.
- $3.6 billion for HUD’s Homeless Assistance Grants program to address the needs of people experiencing homelessness.
- $100 million for legal assistance to prevent evictions.
- $300 million for the competitive tribal housing program, targeted to tribes with the greatest needs.
Advocates should also contact their members of Congress and urge them to use the end-of-year tax extenders legislation to expand and reform the Low-Income Housing Tax Credit (LIHTC) to better serve extremely low-income (ELI) households.
LIHTC is the primary funding source for financing the construction and preservation of affordable housing. While an important resource, LIHTC on its own is generally insufficient to support the construction and preservation of homes affordable to households with the lowest incomes. NLIHC is urging Congress to include the following LIHTC reforms in any tax extenders package:
- Expand the ELI basis boost to 50% for housing developments when at least 20% of units are set aside for households with extremely low incomes or people experiencing homelessness. This provision is included in the bipartisan “Affordable Housing Credit Improvement Act.”
- Set aside 8% of tax credits to help offset the cost to build ELI developments where at least 20% of units are reserved for households with extremely low incomes or those experiencing homelessness.
- Designate tribal and rural communities as “Difficult to Develop Areas (DDAs)” to make them automatically eligible for a 30% basis boost and make it more financially feasible for developers to build affordable homes in these communities. These provisions are also included in the bipartisan “Affordable Housing Credit Improvement Act.”
Learn more about the range of needed changes to LIHTC at: https://bit.ly/3fto1R1
Read the new fact sheet focused on reforms needed for ELI households at: https://bit.ly/3gDnV9o
Contact your members of Congress about LIHTC reforms at: https://p2a.co/4qstqc5