Senator’s Tax Bill Amendment Targets LIHTCs for Artists

An amendment to the Senate tax bill added by Senator Pat Roberts, the Republican senior senator from Kansas, would strike artists’ housing from the list of qualified groups who can benefit from federally subsidized low-income housing. It would forbid developers from LIHTCS to build affordable housing with a preference for artists.

Existing law requires projects that get housing tax credits to meet a “general public use requirement.” That limit was designed to prevent employers from building housing exclusively for their employees and other similar abuses. Instead, any residents who meet the low-income standard are eligible for units built with tax credits. However, there are three exceptions to the general public use requirement. Developers can use LIHTCs to build housing developments with set-asides for residents with “special needs,” or for those “who are members of a specified group under a Federal program or State program or policy that supports housing for such a specified group.” The Housing and Economic Recovery Act of 2008 added artist housing as a category eligible for LIHTC developments.

As written, the legislation makes all existing artists’ housing developments built with LIHTCs retroactively ineligible for the benefit, effectively creating a sudden tax liability for the investors who have used these credits for years. The amendment includes a simple line-for-line language swap. Where current law carves out a special exception for individuals “who are involved in artistic or literary activities,” the new bill would instead specify a benefit for those “who are veterans of the Armed Forces.”