Senate Democrats’ Economic Justice Act Includes LIHTC Provisions

Senate Democrats recently announced a proposal to invest $350 billion in communities of color, including specific policies that would increase investments in affordable housing and promote racial equity in homeownership.

The Economic Justice Act proposes to provide communities of color disproportionately affected by coronavirus with $135 billion for child care, mental health care, primary care, and jobs, as well as $215 billion over the next five years for affordable housing, homeownership, and infrastructure.

The Economic Justice Act would also expand LIHTC by $5 billion over five years. The LIHTC adjustment would modify the formula for the current 4 percent credit on construction of new housing properties, resulting in the construction of an additional 126,000 affordable units over the next decade.

In addition, the proposed act would provide a renter tax credit that would reduce rent and utilities for low-income individuals and families. The bill would also invest $115 billion as a “Down Payment on Building 21st Century Infrastructure,” including investments in high-speed Internet, affordable housing, community development, K-12 public schools, and environmental justice.

The Economic Justice Act would be funded partially by reallocating $200 billion of unspent funds from the CARES Act that were previously provided to the Department of Treasury.