Like many of you, I was up late watching the returns from yesterday’s mid-term elections. As I write this we are still waiting for final results on several races, but a few things are becoming clear. The following are some of my first impressions on what the elections could mean for affordable housing and tax credit developers:
To start, the Democrats will take back control of the US House of Representatives in January and as a result committee leadership will also shift back to Democrats.
- House Ways & Means Committee: Rep. Richard Neal (D-MA) is expected to take over the committee gavel and we are optimistic that given his past leadership sponsoring bipartisan LIHTC and NMTC legislation (including HR 1661, the current LIHTC vehicle in the House) we can expect some positive attention from the Ways & Means on community development issues in the coming Congress. At least five Ways & Means Committee Republicans lost their reelection bids, including Rep. Carlos Curbelo (R-FL), who is the current lead Republican sponsor in the House of Representatives of the Housing Credit Improvement Act. Educating and recruiting new members of congress and particularly new Ways & Means Committee members about the LIHTC, HTC and NMTC will be one of our highest priorities in the coming months. Current Ways & Means Chair Kevin Brady (R-TX) is expected to serve as Ranking Member in the coming Congress.
- Housing Financial Services Committee: Rep. Maxine Waters (D-CA) is expected to lead the Financial Services Committee in the next Congress. With current Committee Chair Jeb Hensarling (R-TX) retiring, there is still some uncertainty as to who will serve as Ranking Member. In terms of seniority, Rep. Peter King (R-NY) is next in line to serve as Committee Chair and is a likely candidate. There will be many new Republicans serving on the Committee in the next Congress — seven current members are retiring at the end of this Congress and at least three more lost their reelection bids.
Republicans built on their majority in the US Senate. Several races are still too close to call at the time that I am writing this so the exact margin remains unclear
- Senate Finance Committee: The Senate Finance Committee will have new leadership in the Congress with the retirement of Chairman Orrin Hatch (R-UT) at the end of this term. Since Hatch is the lead Senate Republican sponsor of the HCIA, advocates will be focused on identifying a new Republican Lead Sponsor. Leadership of the Committee will transition to Sen. Charles Grassley (R-IA). Sen. Grassley currently serves as Chairman of the Senate Judiciary Committee, and he will have to give up this Chairmanship to take over Senate Finance. Republican Committee Member Sen. Dean Heller (R-NV) lost his reelection bid, opening up at least one new spot on the Majority. Sen. Ron Wyden (D-OR) is expected to continue on as Ranking Member on the Finance Committee. Democrat Committee Members Claire McCaskill (D-MO) and Sen. Bill Nelson (R-FL) also lost their reelection races. Notably, Senator Maria Cantwell (D-WA) also one reelection.
- Senate Banking Committee: With Senator Grassley opting to become Chair of the Senate Finance Committee, Sen. Mike Crapo (R-ID) is likely to continue on as Chairman of the Banking Committee. Sen. Sherrod Brown will almost certainly continue on as Ranking Member on the Banking Committee. Democrat Committee Members Heidi Heitkamp (D-ND) and Joe Donnelly (D-IN) both lost their reelection bids so there will likely be at least one new Democratic Member on the Committee as did Sen. Dean Heller (R-NV). With Sen. Corker’s (R-TN) retirement we can expect at least two new Republican Members in the next Congress.
With the election over, our attention turns to the Lame Duck session of Congress. There are still several must-pass legislative vehicles that Congress needs to address including several appropriations bills and tax extenders. We are hopeful that one of these measures will prove to be a vehicle to pass additional provisions from the HCIA including the flat 4% LIHTC for TEB financed transactions. These could also be potential vehicles for critical historic tax credit legislation and/or the extension of the the NMTC.
What will the tenure of the next Congress look like? One election result that may shape things is that many of the more ‘moderate’ voices from both parties retired or lost their reelection bids. Historically, split government has led to great compromises, like the deal making in the 1980s that led to the 1986 Tax Act. But it just as often results in more partisanship and gridlock. As they say, the proof will be in the pudding.
We will continue to update this story as we learn more information. Stay tuned and please feel free to reach out to me at firstname.lastname@example.org with your questions and observations!