A collegial, efficient, and nevertheless long markup session in the Senate Finance Committee produced a tax extenders bill with several positives for affordable housing. Chairman Ron Wyden (D-OR) joined with Ranking Member Orrin Hatch (R-UT) to offer a selected set of tax provisions to extend for two years. Among the provisions included in the bill were several that could help housing and community development efforts if and when the bill becomes law:
- Extend the Mortgage Debt Relief Act, which protects households going through foreclosure, short sale, or mortgage modification from having to pay an additional tax bill. NHC and many allies in the National Foreclosure Prevention and Neighborhood Stabilization Task Force wrote to members of the committee in support of this provision, and NHC joined a separate coalition effort of national groups earlier this month. Senator Enzi (R-WY) opposed this provision as unneeded, but Senators Stabenow (D-MI), Nelson (D-FL), Brown (D-OH), and Isakson (R-GA) all voiced strong support, and Senator Stabenow cited data from many states still facing high rates of potential foreclosures.
- Extend the minimum 9% credit percentage for the Low Income Housing Tax Credit. The ACTION Campaign, of which NHC is a member, has long advocated for this provision, as well as the 4% provision below. This was included in the Chair’s mark. Senator Cantwell (D-WA) in particular spoke in support of the Housing Credit.
- Enact a 4% minimum credit percentage for Low Income Housing Tax Credits used to acquire existing properties (although not the credits that accompany volume cap private activity bonds. This provision was added in the Chair’s modified mark.
- Renew the New Markets Tax Credit for two years, which supports community development in places underserved by other capital sources. Senators Wyden, Schumer (D-NY), Brown, and Cantwell called out the NMTC as a valuable program. The Committee also approved an amendment from Sen. Brown to to create a new Manufacturing Communities Tax Credit, modeled on the NMTC and funded through unused credits.
- Extend a provision making it easier for military families in Housing Credit properties near military bases, by excluding the military Basic Allowance for Housing from income calculations.
This bipartisan effort came with the important caveat that this would be the last such extenders bill, and that further actions would have to come through a process of comprehensive tax reform. Such an effort is quite unlikely this year given the action already taken by Rep. Dave Camp (R-MI) in the House, but Congressional leaders have said they will pursue it again after the election. The House has yet to act on a tax extenders package.