The Bipartisan Policy Center (BPC) sent a letter to Treasury Secretary Scott Bessent on reforming LIHTC guided by two key principles and divided into administrative and legislative actions.

Key Principles

  1. Maximizing the number of affordable units produced per dollar of LIHTC allocation; and
  2. Ensuring the long-term affordability and sustainability of LIHTC-financed housing.

Administrative

  • Adopt a common base QAP with locally funded add-ons;
  • Adopt a common base building standard for LIHTC developments;
  • Evaluate the impact of capping hard and soft costs for LIHTC projects;
  • Evaluate the impacts of adjusting LIHTC compliance and disbursement timelines; and
  • Raise the cap on Fannie Mae and Freddie Mac permitted level of LIHTC investment.

Legislative

  • Exempt LIHTC developments from Davis-Bacon prevailing wage requirements;
  • Exempt LIHTC developments from NEPA reviews;
  • Encourage Congress to pass legislation extending the LIHTC affordability period and expanding access to PABs for affordable housing projects; and
  • Establish a LIHTC credit exchange for institutional and retail investors.

A brief from the Urban Institute focuses on how States Can Ensure New Low-Income Housing Resources Get More Affordable Housing Built:

  • Encourage cost controls to yield more housing per dollar;
  • Reward projects that employ cost-reducing and time-saving building techniques, such as modular and panelized housing;
  • Promote mixed-income housing to cross-subsidize in expensive high-opportunity areas; and

Encourage projects in places with better permitting, zoning, and impact fee policies.