Steps Congress can take to save affordable housing in tax reform
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Tax reform should be an opportunity build an economy that benefits all Americans. It’s not just about cutting taxes, but about creating a system that works for everyone and strengthening programs that work.

Unfortunately, the House’s tax reform bill would undermine proven programs and decimate America’s ability to create homes affordable to our working families, veterans and seniors – hurting low-income families at a time when they are already struggling to get ahead. While the Senate bill thankfully rejects the most devastating changes proposed by the House, and would actually strengthen the Housing Credit in some modest ways, it would still result in fewer homes, so there is a long way to go to ensure low-income families are not left behind in tax reform.


Currently, the demand for affordable housing far outstrips supply and the gap is expected to grow worse. And by now we know all too well the impact stable affordable homes can have on America’s health, education and economy. Without them, success in school or on the job is harder to achieve and it’s more difficult to stay healthy, consequences that ripple throughout our communities. 

Our country’s main tool for combating this challenge by creating and preserving affordable rental homes has and continues to be the Low-Income Housing Tax Credit (Housing Credit), and tax reform should be an opportunity to strengthen it.

When Congress last passed tax reform in 1986, it wisely created the Housing Credit in order to provide an incentive to the private sector to develop and preserve affordable housing. Tax reform should build on the progress that has been made since then – more than 3 million affordable homes – and further strengthen the Housing Credit and supporting tools.

Both the House and Senate bills do maintain the Housing Credit and we are thankful for that decision. However, the House bill would have a devastating impact on low-income families – it would repeal Private Activity Bonds, including multifamily Housing Bonds, which are critical to sustaining the current level of Housing Credit financing.

Both the House and Senate bill would also impact affordable housing production by virtue of lowering the corporate tax rate. While we do not take a position on the wisdom of lowering the corporate rate, one of its impacts would reduce the future supply of affordable rental housing by nearly 300,000 homes over 10 years, and eliminating private activity bonds would reduce the future supply by nearly one million homes, according to Novogradac & Company analysis. At a time when over 11 million renters pay 50 percent or more on housing alone, we cannot afford to significantly scale back our supply of affordable homes.

There is currently before the Senate Finance Committee a low or no-cost proposal to ensure that current production levels of affordable homes would not be adversely impacted by the reduction in the corporate tax rate. We urge Congress to adopt it to ensure that we continue to produce as many affordable homes in a reformed tax code as we do today and to reject the elimination of Private Activity Bonds.

There is strong bipartisan support for the Housing Credit in Congress. About one-fourth of the Senate and the House have signed on to the Affordable Housing Credit Improvement Act, legislation introduced in the Senate by Sen. Maria CantwellMaria Elaine CantwellData privacy: Consumers want it, businesses need it — it's time our government delivers it Don't revive logging in national forests Top Finance Dem offers bill to help those repaying student loans save for retirement MORE [D-Wash.] and Chairman of the Senate Finance Committee, Orrin HatchOrrin Grant HatchTrump gambles in push for drug import proposal Biden's role in Anita Hill hearings defended by witness not allowed to testify 'Congress' worst tax idea ever'? Hardly. MORE [R-Utah], and in the House by Rep. Pat Tiberi [R-Ohio] and Richard NealRichard Edmund NealRepublicans attempt to amend retirement savings bill to include anti-BDS language House votes to boost retirement savings Steyer plans impeachment push targeting Democrats over recess MORE [D-Mass.]. The support for the program is undeniably strong and strikingly bipartisan, which should be reflected in tax reform.

We simply cannot afford to increase the growing affordable housing supply gap that already hits struggling communities the hardest. Tax reform presents Congress with an opportunity to strengthen communities and boost our economy by preserving and strengthening proven tools. It should seize it.

Anthony J. Alfieri is the president of the Affordable Housing Tax Credit Coalition.