In this season of giving, let’s provide more affordable housing
In 2017, I wrote about my holiday wish to prevent the possible demise of affordable housing’s most important funding tool, the low-income housing tax credit (LIHTC). At that time, the incredibly impactful tax credit, responsible for over 3 million housing units since its creation in 1986, was facing a Congress that could have dismantled not only successful tax credit programs in place but also failed to pass legislation for the bipartisan Cantwell Hatch Bill, designed to encourage preservation and construction of thousands of rental housing units by boosting LIHTC allocations.
The affordable housing industry was able to weather that storm and, in the intervening five years, has accomplished some extraordinary feats, including many realized during more than two years of pandemic setbacks. For example:
- Between 2019 and 2020, 99,845 federally assisted homes were added to the National Housing Preservation Database (NHPD) and 44,629 homes were lost, leaving a net gain of 55,216 new affordable homes.
- Federal support throughout the pandemic helped keep renters in their homes.
- According to the United States Interagency Council on Homelessness (USICH), every day, an average of 2,500 people exit homelessness, which totals up to almost 900,000 people a year exiting homelessness through programs that work.
However, there are dark clouds to this silver lining, such as:
- USICH data also state that as those 2,500 people exited homelessness, at the same time, almost 2,500 people become homeless, meaning that although almost 900,000 people a year exit homelessness, 900,000 more fall into it.
- According to the National Low Income Housing Coalition, today on a national scale, “only 36 affordable and available rental homes exist for every 100 extremely low-income renter households.” In 2022, the affordable housing supply cannot meet the demand of low-income renters in every U.S. state.
- As of March 2022, eviction filings had risen back to pre-pandemic levels, according to The Eviction Lab at Princeton University.
And so, Christmas 2022 finds me, and other advocates for affordable housing, wishing again for more housing units that people can afford. This year, we plead for an expansion of the LIHTC to be part of any year-end legislation, to pass both chambers before the makeup of Congress changes this January.
Specifically, we seek the passage of laws providing tools that enable our industry to preserve more than 1.5 million affordable rental homes. These resources include:
- Restoring the 12.5 percent housing credit allocation increase to the LIHTC program that expired at the end of 2021. These additional resources can be deployed immediately, allowing shovel-ready developments to move forward; and
- Regarding tax-exempt bond financing, lower the “50 percent test” to 25 percent in order to increase LIHTC access. This change would allow all states to use their private-activity bond cap more effectively, thereby allowing states to complete hundreds of thousands of additional affordable housing units.
My organization recently completed a nationwide survey, which revealed that 89 percent of Americans believe unconditionally that “housing is a human right” and 62 percent believe “stable affordable housing reduces crime and other societal ills including drug abuse and domestic violence.” Sixty-eight percent believe local elected officials should “create partnerships with funding sources, on-site resident services providers and others” to create more housing.
The need for housing is overwhelming. Popular support for housing exists. Developer infrastructure is in place to rapidly preserve existing housing and create new construction — all that is missing is the legislative support to jumpstart construction in 2023.
Our message to Capitol Hill? There are too many lives depending on you. Let’s ensure our country gets more affordable housing.
Richard F. Burns is CEO and trustee of the nonprofit affordable housing organization, The NHP Foundation, with offices in New York, Washington and Chicago. He has more than 40 years of experience as a real estate investment professional.