The U.S. House of Representatives this week passed a bipartisan tax bill that included an expansion of the Low-Income Housing Tax Credit (LIHTC) program, a move lauded by housing advocates including the Mortgage Bankers Association (MBA) and the National Housing Conference (NHC).
But political observers say the odds that the bill will make it through the Democratically controlled U.S. Senate is uncertain, even as the narrowly divided House still demonstrated broad bipartisan support for the measure in a final vote of 357 to 70.
Senate Republicans have called for additional hearings and potentially other changes to the measure, according to reporting at Politico.
LIHTC expansion
Housing advocates at MBA and NHC lauded the passage of the Tax Relief for American Families and Workers Act of 2024. MBA President and CEO Bob Broeksmit said the legislation should make a difference in the construction of affordable housing units and urged the Senate to pass it swiftly.
“MBA is pleased the House has passed this bipartisan bill that increases the availability of [LIHTC],” he said. “The enhancements to the LIHTC program will improve the supply and affordability challenges in the rental market by producing an estimated 200,000 additional rental units over the next two years.”
NHC President and CEO David Dworkin also approved of the bill, calling it “a crucial step towards financing the production of over 200,000 affordable homes if enacted,” while also calling on the Senate “to immediately pass this crucial bipartisan legislation so hardworking Americans across the country can receive relief on their rent payments and have access to safe, affordable housing.”
On Thursday, NHC sent out an additional call to action, encouraging members to contact their senators and urge the passage of the law in the upper chamber, which would send it to the desk of President Joe Biden for final approval.
Beyond the housing provisions, the bill would also expand the child tax credit and restore certain tax breaks for businesses related to research, development and capital expenses, according to an overview by The New York Times.
Lawmakers feeling pressure
But housing is also on the minds of certain lawmakers as they head into a narrowly divided congressional session during a high-profile presidential election year, according to a Thursday report from Politico.
“The crisis of affordability is drawing more attention in Congress than at any time in years since the Federal Reserve’s aggressive interest rate hikes crippled supply by restricting builders’ access to capital and discouraging owners from selling,” the story explained.
Calls for legislative action on housing affordability are “growing exponentially,” according to Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee. He told the outlet that lawmakers are being “besieged” by calls from employers who are desperately seeking housing for their workers.
“It comes up every time we’re at home,” said Sen. Mike Rounds (R-S.D.). “[That’s] one of the reasons why we’re trying to do some stuff in regards to housing.”
The difficulty of finding some kind of legislative remedy comes from multiple directions, including the fact that Congress does not have a lot of control over things like a lack of housing supply or local zoning laws that could restrict construction.
Voters want action
Voters, however, may not be so understanding, according to Urban Institute researcher Jim Parrott, a former senior adviser on housing for President Barack Obama.
“There’ll be blowback over congressional inaction on this,” Parrott told Politico. “It seems inevitable that if Congress can’t get its act together on this, the sentiment on both sides will be pretty, pretty brutal.”
Support for LIHTC provisions in the House-passed bipartisan tax bill shows “that housing affordability is an issue that is resonating more and more with members of Congress of both political parties because they’re hearing about it from their constituents,” Bipartisan Policy Center housing researcher Dennis Shea told the outlet.
Sen. Sheldon Whitehouse (D-R.I.) on Wednesday said that he planned to bring bills to the Senate floor that would “make housing more affordable for lower-income Americans” by offering lower-income, first-time homebuyers a tax credit of $15,000.
But substantive action will require some degree of collaboration between the political parties, and the road to compromise seems historically narrow. Still, some lawmakers find the House’s passage of the tax provision encouraging.
