Legislative Landscape for the Housing Credit in 2017

Housing Credit and Housing Bonds are Indispensable Part of Tax Code and Should Be Retained

The outcomes of the November elections have increased the likelihood of legislation that could have a major impact on the Housing Credit in 2017.

With Republican control of the White House and both chambers of Congress, there will be fewer obstacles to enacting major legislation than under the divided government of the past six years. In this environment, there will be both opportunities for and threats to the Housing Credit.

In his acceptance speech, President-Elect Donald Trump said that investing in America’s infrastructure will be a top priority for his administration. Any infrastructure legislation will likely include tax provisions to repatriate foreign earnings, which would help offset the costs of domestic spending to promote growth and renewal.

The ACTION Campaign will make the case that the Housing Credit should be expanded and strengthened in any infrastructure legislation, given the tangible and significant impacts of Housing Credit development for residents, communities and local economies.

The ACTION Campaign is a national coalition of roughly 1,300 organizations and businesses calling on Congress to address our nation’s severe shortage of affordable rental housing by expanding the Low-Income Housing Tax Credit.

Infrastructure legislation could move on its own or as part of a larger tax reform agenda, which could pose threats to both the Housing Credit and tax-exempt multifamily Housing Bonds.  With Republicans in control of Congress and the Presidency, tax reform stands a better chance of enactment than it has in decades. 

President-Elect Donald Trump’s tax plan would go farther than the House blueprint in lowering the top corporate tax rate from 35 to 15 percent. Like the House blueprint, it would eliminate nearly all tax expenditures in order to achieve this rate reduction, and is silent on the issues of the Housing Credit and Housing Bonds.

In the Senate, no comprehensive tax reform proposals have emerged, but the Housing Credit is in a strong position in the Senate Finance Committee. Both Senate Finance Committee Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR), who will be very influential in shaping tax reform, are original co-sponsors of legislation to expand the Housing Credit.

The ACTION Campaign will continue to make the case that the Housing Credit and Housing Bonds are indispensable parts of our nation’s tax code and should be retained, expanded and strengthened in tax reform

We are continuing to build bipartisan support for the Cantwell-Hatch Affordable Housing Credit Improvement Act of 2016 in order to lay a strong foundation of bipartisan support for the Housing Credit going into 2017.

The Housing Credit legislation introduced in May, S. 2962, has 14 bipartisan co-sponsors. Thirteen of these supporters will be returning to Congress in 2017; only Senator Kelly Ayotte (R-NH) was not reelected.

We are also continuing to educate members of Congress about the provisions in S. 3237, the comprehensive legislation introduced in July.

The primary focus of the “lame duck” session of Congress will be to continue funding the government beyond December 9, when the current continuing resolution expires.

While it is possible that Congress will take up year-end tax legislation that could impact the Housing Credit, the Republican-controlled House and Senate are generally more inclined to take up these issues in the next Congress in order to negotiate with President-Elect Trump instead of with President Obama.

If any tax legislation does advance, we will urge the inclusion of provisions from the Affordable Housing Credit Improvement Act.

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