Today, Chairman Dave Camp (R-MI) of the House Ways and Means Committee released a long-awaited draft bill for tax reform. Housing stakeholders will need time to analyze the 979-page bill, but a few high points are clear immediately:
- The Housing Credit survived. By including the Low Income Housing Tax Credit in such a large-scale reform effort, the Ways and Means Committee recognized how many people and communities across this country depend on the program to create and preserve affordable housing. More and more, other areas of affordable housing look to the Housing Credit as a critical capital source: public housing, elderly housing, veterans housing, housing for people with disabilities, and more. With a track record of more 2.6 million rental homes over more than 25 years, the Housing Credit has proven itself an essential pillar of affordable housing.
- No new resources, and maybe some lost. It will take deeper analysis to be sure, but from the summary, it doesn’t look like the tax reform proposal would increase resources flowing to housing. On the rental side, the proposed changes to the LIHTC (see them on page 87 of the summary) could well be a net decrease, especially considering the proposed elimination of the 4% credit attached to private activity bonds. On the homeownership side, the proposed limitations on the home mortgage interest deduction have provoked strong negative reactions from the National Association of Realtors, among others. None of the resources generated by the limitations appear to flow to housing.
- Tax reform is very far from law. Chairman Camp did not have a Democratic co-sponsor to this bill, and he has a new ranking member to consider now. House Speaker John Boehner has dismissed the idea of any tax reform legislation passing this year. Elections are around the corner, and a new Congress resets the clock in many ways.
NHC will stay focused on how tax reform could affect the availability of safe, decent, and affordable housing for all, with particular attention to the Low Income Housing Tax Credit. Watch this blog and our Washington Wire for more.