WASHINGTON, DC – (RealEstateRama) – The National Housing Conference (NHC) strongly supports the Save Affordable Housing Act of 2019, which was introduced in the House and Senate last week. This bipartisan legislation is designed to reverse a loophole in the tax code that has caused the loss of 50,000 units of existing affordable housing – 10,000 units a year – according to analysis by the National Council of State Housing Agencies (NCSHA).
“This bill is critical to ensuring we don’t lose much needed affordable housing units due to a loophole in the tax code. Closing this loophole can preserve 10,000 homes for low income families each year,” said NHC President and CEO David M. Dworkin.
The Senate bill (S.1956) was introduced by Senators Ron Wyden (D-WA), Todd Young (R-IN), Ben Cardin (D-MD) and Sherrod Brown (D-OH). The House bill (H.R.3479) was introduced by Representatives Joe Neguse (D-CO-02), Don Beyer (D-VA-08), and Jackie Walorski (R-IN-02). It is supported by a coalition of housing leaders, including NHC members The National Housing Trust, Enterprise Community Partners, Stewards of Affordable Housing for the Future, National Association of Affordable Housing Lenders, Housing Partnership Network, Local Initiatives Support Corporation, and the Low Income Investment Fund.
Under the qualified contract provision, an owner of a LIHTC property may, after year 14 of the minimum 30-year affordability commitment, approach the Housing Credit allocating agency (usually the state housing finance agency) to request a “qualified contract.” This request begins a one-year period during which the allocating agency seeks a qualified buyer to purchase the property and maintain it as affordable for the duration of the extended use period. If the allocating agency fails to identify a qualified buyer within one year, the property is released from the affordability requirements of the Housing Credit program. As the qualified contract formula price almost always significantly exceeds the market value of the property a buyer is rarely found. Since this loophole was first exploited, more owners are using qualified contracts as a strategy to flip LIHTC properties to market rate and raise rents after only 15 years of affordability.
“This legislation is a critically important step towards addressing the housing affordability crisis all over America,” said Dworkin. “We are not building enough affordable housing by any measure. Our task of addressing the housing affordability crisis is made more difficult with this gaping hole in our current supply.”
NHC will continue to work with policymakers and its diverse members to address affordable housing barriers and create modern lasting solutions.
About NHC: The National Housing Conference has been defending the American Home since 1931. Everyone in America should have equal opportunity to live in a quality, affordable home in a thriving community. NHC convenes and collaborates with our diverse membership and the broader housing and community development sectors to advance our policy, research and communications initiatives to effect positive change at the federal, state and local levels. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization. #OurAmericanHome @natlhousingconf