Bipartisan LIHTC Expansion and Improvement Bill Reintroduced

On May 11, bipartisan groups of senators and representatives introduced the Affordable Housing Credit Improvement Act (AHCIA) of 2023 in the Senate and House. The legislation is sponsored by Senators Maria Cantwell (D-WA), Todd Young (R-IN), Ron Wyden (D-OR), and Marsha Blackburn (R-TN), along with Representatives Darin LaHood (R-IL), Suzan DelBene (D-WA), Brad Wenstrup (R-OH), Don Beyer (D-VA), Claudia Tenney (R-NY), and Jimmy Panetta (D-CA).

The Context: The AHCIA has been introduced in the past four congresses, and each time has earned broad bipartisan support. The provisions included in the AHCIA are often included in other major housing bills introduced each session.

In the 117th Congress, nearly half of all members of Congress including members from both parties in both chambers cosponsored the legislation, including 50 percent of Senate Finance Committee members and 77 percent of the House Ways and Means Committee. And during this first session of the current 118th Congress, some AHCIA provisions were also included in the Decent, Affordable, Safe Housing for All Act and President Biden’s fiscal year 2024 budget proposal.

One Level Deeper: The AHCIA seeks to expand and strengthen the Low-Income Housing Tax Credit by doing the following:

• Increase Housing Credit allocations by restoring the 12.5 percent cap increase that expired in 2021 and further increasing resources by 50 percent to help meet the vast and growing need for affordable housing.
• Allow states to maximize affordable housing production and preservation by lowering the threshold of Private Activity Bond financing — from 50 to 25 percent — required to trigger the maximum amount of 4 percent Housing Credits available to individual properties.
• Enable the LIHTC to better serve hard-to-reach communities including rural, Native American, high-poverty, and high-cost communities, as well as extremely low-income and formerly homeless tenants.
• Make the Housing Credit a more effective tool for preserving the nation’s existing affordable housing inventory by simplifying and aligning rules.
• Codify protections for veterans and victims of domestic and dating violence by formally adopting within the tax code hard-sought IRS guidance and protections under the Violence Against Women Act.
• Mitigate NIMBY opposition by removing outdated requirements.
• Streamline and simplify program rules to align the LIHTC program with other affordable housing programs and remove administrative inefficiencies.