Legislators Introduce Bipartisan Workforce Housing Tax Credit Act
Senate Finance Committee Chair Ron Wyden (D-OR), Senator Dan Sullivan (R-AK), and House Ways and Means Committee members Representatives Jimmy Panetta (D-CA) and Mike Carey (R-OH) recently introduced the Workforce Housing Tax Credit Act. If passed, the legislation would establish a new tax credit to produce affordable rental housing for households earning between 60 and 100 percent of the area median income (AMI).
The Workforce Housing Tax Credit is designed to produce more housing to accommodate middle-class families and young people starting their careers, and to allow the workforce to live in the communities where they work.
One level deeper: The program is modeled on the LIHTC program, and the bill is an updated version of the middle-income housing tax credit proposal Senator Wyden introduced earlier this year as part of his Decent, Affordable, Safe Housing for All Act.
The legislation would provide states with the greater of $1 per capita or $1.5 million in 2024, adjusted for cost of living thereafter, with the intention that the program would be administered by each state’s Housing Credit agency. The proposed workforce housing credit does not divert resources from LIHTC as states would have the option to convert workforce housing credits to LIHTCs.
The program is designed to work with the LIHTC such that developers could finance a property with both credits. Under this scenario, units designated for households up to 60 percent of AMI would be financed with the LIHTC, and units designated for households between 60 and 100 percent of AMI would be financed with the middle-income housing tax credit. The effective date for this provision is buildings placed in service after 2023, in taxable years after 2023.
The reaction: The bill has generated strong support from the nation’s real estate community. The National Association of Home Builders, the National Multifamily Housing Council, and the National Apartment Association have all signaled their support.