From my years as housing commissioner in New York City to my time as HUD secretary, I’ve witnessed how an affordable home impacts not just millions of lives but also our broader economy and national wellbeing.
We all know the facts. When there’s a sufficient supply of affordable homes, we see neighborhoods and communities prosper. When we lack affordable homes, we see declines in health, wealth, and opportunity, putting a damper on growth that hobbles our national economy.
We all breathed a sigh of relief when Congress sidestepped a potentially debilitating shutdown and President Biden signed the FY24 spending package just under the wire. That deal included $81.4 billion to HUD for critical affordable housing programs, with $28 billion going to USDA’s Rural Housing Service, serving an often-overlooked category of folks struggling to get by amid still-too-high housing and utility costs.
But still left on the table: the bipartisan tax package (H.R.7024), which would fortify the Low-Income Housing Tax Credit. The legislation sailed through the House in a vote of 357 to 70 but has languished in the Senate for the last two months.
The Housing Credit, as it’s known, is our nation’s strongest tool to create and preserve affordable rental homes nationwide. Indeed, this tax package’s two Housing Credit provisions would finance an additional 200,000 affordable rental homes over the next decade. Enterprise Community Partners doesn’t just advocate for good policy and build the capacity of our partners on the ground – we’re also a Housing Credit syndicator and affordable housing owner and operator, so we directly understand how this unique public-private partnership has benefitted millions of American families. In fact, the Housing Credit is one of the reasons that – alongside thousands of partners – Enterprise is celebrating the creation of our one millionth home this spring.
When I served as budget director under President Obama, we knew that tax negotiations were always about giving both parties something to tout. This time around, Republicans sought an extension of three business tax credits, while Democrats were pushing for renewal of the expanded child tax credit. But one of a very few bipartisan provisions added to this tax package—where Democrats and Republicans agreed without objection—was the Housing Credit.
That level of bipartisanship is seldom seen these days around Capitol Hill.
Why does the Housing Credit have such clear support? Throughout most of my career, housing has generally been a top-priority issue in some but not all parts of the country, mostly big, high-cost, coastal cities. Today, that’s changed. Now we’re seeing high rents in formerly affordable cities like Boise and Roanoke, with rural and Tribal communities also seeing their costs shoot up alongside rising interest rates, rising construction costs, and supply chain disruptions.
During Covid, Americans saw rents jump 18 percent on average, the highest increase on record. Americans were looking for more space, more opportunities, and more flexibility, putting increased strain on a supply-constrained housing market. Rising interest rates have kept more renters from homeownership, and while we’re seeing some costs moderate, we’re still running a shortage of 7 million affordable homes for the lowest-income households in the country.
As I said, that’s putting a huge burden on our economy – and it’s driving the country’s historically-high rates of homelessness. Despite some misinformation floating out there, all the research suggests that high housing costs are the most predictive variable to explain differences in homelessness rates in major towns and cities. Homelessness is not a choice, but the tragic end-stage failure of our housing system. And the Housing Credit is a critical tool here as well: about one-fifth of Enterprise’s portfolio is permanent supportive housing built with the Housing Credit.
So where does that leave us with the action on Capitol Hill – and the Housing Credit expansion that would increase the supply of affordable homes and drive down homelessness?
Sen. Schumer has added the tax package to the Senate calendar but that doesn’t necessarily guarantee a vote – he and Sen. Wyden, chair of the Finance Committee, have said they’d like to see a vote by Tax Day, April 15. A few Senate Republicans have expressed support for the tax package, but others have suggested it can wait until after the election in November—or worse, until a large tax package is negotiated to deal with the expirations from the Tax Cuts and Jobs Act in 2025.
That’s not fast enough, and it’s no guarantee for the American families that desperately need housing now. Passing the Housing Credit expansion would also signal to the broader economy that there is no partisanship when it comes to securing a safe, affordable home for the millions of Americans without one.
I hope you’ll join me, NHC, and the ACTION Campaign – a coalition of 2,400 national, state, and local organizations and businesses – in urging the Senate to pass the tax package as soon as possible. This is a critical moment for the Housing Credit. We have a chance to save households money, boost jobs, improve local neighborhoods, drive down inflation, and set families on a trajectory for success.