On Wednesday, January 28, President Obama presented his 2014 State of the Union address to a joint session of Congress, offering several domestic policy proposals focused on expanding opportunity. Noticeably absent from his remarks was how access to safe, decent affordable housing is cornerstone to the expansion of economic and social opportunity.
President Obama did, however, call for a continued commitment to comprehensive tax reform. You’ll remember that the affordable housing industry spent much of 2013 educating stakeholders and Members about the benefits of certain provisions within the tax code, namely the Low-Income Housing Tax Credit (LIHTC), a program which over the years has proven to be the most effective affordable rental housing development and preservation tool in the United States.
As we move into 2014, we as an industry continue to face major challenges and significant obstacles to the LIHTC program’s continued success. In particular, while the momentum around tax reform experienced over the last year has slowed considerably, we must be mindful of how the housing credit will be impacted should the debate start to gain ground once again.
We as an industry have also spent much of the last year taking a reactionary approach to various challenges that have arisen. In 2014, we as an industry should seize the opportunity to take a more proactive approach towards advocating for an expansion of the housing credit. A few policy proposals that have been explored over the last year include ideas such as:
- Increase Low-Income Housing Tax Credit allocation by 50%, Bipartisan Housing Policy Center proposal
- Allow states to convert Private Activity Bond (PAB) volume cap into LIHTCs for state housing finance agencies (HFAs) to allocate, Obama Administration proposal from FY 2014 budget request