Yesterday a procedural vote to consider the Tax Relief for American Workers Act (H.R. 7024) in the U.S. Senate failed. The tax bill, which passed overwhelmingly in the House in January 357 to 70 would have restored the 12.5% increase to 9% low-income housing tax credit (LIHTC) allocations for 2023-2025 and decreased the private activity bond (PAB) financing threshold for 4% LIHTC from 50% to 30% for PAB allocations made in 2024-2025.

“Following bipartisan support for the Tax Relief for American Families and Workers Act of 2024 in the House, we are deeply disappointed to see this bill fail in the Senate today. Critically, the tax bill would have reduced the ‘50 percent test,’ which would allow New York to build more affordable housing by reducing the amount of bonds required to access 4 percent Low Income Housing Tax Credits. The bill could have helped finance an additional 4,400 affordable units in New York City alone at a time when we need them the most.
We are grateful to Majority Leader Schumer for his leadership on the package and for securing this expansion of the Low-Income Housing Tax Credit. As the 2017 Trump-era tax cuts approach their expiration next year, the New York Housing Conference remains committed to fighting for strengthening federal affordable housing financing programs and protections for New Yorkers.” – Brendan Cheney, Director of Policy and Operations, New York Housing Conference

The number of tax-exempt private activity bonds each state can issue are limited by the Federal “volume cap.” As the demand for affordable housing in New York and many other states now significantly outpaces the supply of private activity bonds, the 50% test poses a major barrier to affordable housing production. NYHC has long advocated for lowering this threshold from 50 to 25%, as proposed in the bipartisan Affordable Housing Credit Improvement Act (AHCIA), which would finance more than 60,000 affordable homes in New York alone over the next decade. Lowering the 50% test will continue to be a top legislative priority for NYHC.