Year-End Federal Tax Priorities: Fixing 4% and Recycled Bonds
With a possible year-end tax extenders bill and/or technical corrections tax bill, NYHC is advocating to make Private Activity Bonds more efficient in New York to create more affordable housing. The two ways we hope to achieve this are by:
- Fixing the 4% LIHTC Rate– By fixing the currently floating rate, $300-350 million of LIHTC equity would be invested in affordable housing in New York state. This would make up for the decreased pricing of the housing credit which resulted from the lower corporate rate, enacted in the Tax & Jobs Act. Novogradac estimates that more than 65,000 additional rental homes could be financed nationwide from 2019 to 2028 if a minimum 4% floor is established. Read more here.
- Expanding Eligible Use of Recycled Bonds– As outlined by the Furman Center’s 2017 blog post, “A Simple Tweak to the Federal Tax Code Would Support More Affordable Housing“, expanding eligible uses for recycled bonds can free up existing resources. This would lead to about $250 million in bond cap available for multifamily housing with 4% credits annually.
Plan to Preserve Public Housing
Yesterday, Mayor de Blasio confirmed his intent to convert 62,000 public housing units through RAD and other programs. Conversions would allow a new ownership structure that can leverage Section 8 rental assistance to secure private financing for repairs. The conversions from public housing to affordable housing also bring private sector management. Full press release from City Hall is linked here. NYHC is supportive of expanding RAD conversions to ensure financing is available for needed repairs. While the announcement indicates $13 billion in repairs will result from these conversions, we expect a budget gap will remain even after additional strategies to reduce costs and increase revenue are announced. NYHC will be advocating for the City, State and Federal government to increase funding to ensure that public housing residents are provided decent and safe housing conditions. Creating a backdrop of uncertainty to yesterday’s announcement is the Southern District Court ‘s rejection of the settlement agreement entered into by NYCHA and US Justice Department. It is unclear what will happen next in this process to ensure that NYCHA achieves compliance with federal laws protecting residents from poor housing quality.
Fighting Source of Income Discrimination
This month, US Senators Orrin Hatch (R-UT) and Tim Kaine (D-VA) introduced the Fair Housing Improvement Act of 2018 (S.3612) to protect veterans and low-income families from housing discrimination. Their bipartisan proposal would expand the Fair Housing Act’s protections to prohibit housing discrimination based on source of income or veteran status, giving more families access to affordable housing and a shot at economic mobility. NYHC supports this important legislation combating housing discrimination. We are proud to advocate with Enterprise Community Partners, Erase Racism and the Fair Housing Justice Center for similar legislation at the state level in the #BanIncomeBiasNY campaign. Enterprise Community Partners, leading this campaign, produced a moving video, telling the story of housing discrimination on one family in New York. We look forward to making progress on this issue with our partners in 2019!