This new House affordable housing bill seeks to restore the Housing Credit’s production potential. After the Tax Cuts and Jobs Act of 2017 resulted in a reduction in the value of the Housing Credit, this proposed bill could be the remedy that unintended consequence.
According to accounting firm Novogradac and Company, a gap of an estimated 235,000 affordable rental homes will not be constructed over the next 10 years due to the reduced corporate tax rate.
The Low-Income Housing Tax Credit (Tax Credit) lowers the corporate tax rate from thirty five percent to twenty one percent and changes the inflation factor for future Tax Credit and private activity bond allocations.
The potential future and significant decrease in affordable housing production will also result in the loss of over 200,000 jobs and billions of dollars in business income. Federal, state, and local tax revenue across the United States will also be lost.