5 Benefits of the Affordable Housing Credit Improvement Act
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THE AFFORDABLE HOUSING CREDIT IMPROVEMENT ACT WOULD SUBSTANTIALLY CONTRIBUTE TOWARD ADDRESSING THE AFFORDABLE HOUSING CRISIS.
Introduced to Senate in April 2021, the Affordable Housing Credit Improvement Act (AHCIA) legislates to expand and strengthen Housing Credits. Housing advocates are pushing for the bill to be passed to address citizens’ pressing housing needs. Here are five benefits of the AHCIA:
1. INCREASES AFFORDABLE HOUSING PRODUCTION
Through successful public-private partnerships, the Housing Credit offers a proven track record of financing nearly 3.5 million safe, decent, and affordable homes in rural, suburban, and urban areas. The AHCIA would increase the annual Housing Credit distribution by 50% over its current level, which is especially urgent as the Housing Credit is now facing its lowest allocation in four years.
Residents who are essential workers, veterans, seniors, people with disabilities, and low-wage workers with a national median income lower than $18,000 are the ones who will benefit most from the AHCIA. If residents were forced to pay market-rate rents, many would be unable to pay rent and potentially lose their housing.
The Act could create over 2 million affordable housing units that could house more than 4.7 million low-income citizens, supporting 3 million jobs, providing $345 billion in wages and business income, and generating $119 billion in tax revenue.
2. SERVES COMMUNITIES
The AHCIA would make more developments financially feasible for extremely low-income and formerly homeless tenants. It would also support Housing Credit developments for veterans and encourage developments in rural and Native American communities.
Additionally, it would facilitate the revitalization of high-poverty communities and the development of more properties in high-opportunity areas.
3. PRESERVES AFFORDABLE HOUSING
The AHCIA would grant further discretion to state agencies to extend the disaster reconstruction and replacement period beyond 25 months for families needing more time to restore their damaged properties. States could provide up to an additional 12 months for a total of 37 months of disaster recovery. If additional time beyond 25 months is necessary, such time will be added to the compliance period.
This means that the Act would facilitate safe tenant relocation during the rehabilitation of Housing Credit properties, ensuring that properties are given enough time to rebuild after disasters and be flexible for existing tenants when refinancing properties.
4. STREAMLINES PROGRAM RULES & PROMOTES EFFICIENCY
The AHCIA would ensure that rules designed to prevent college students from living in Housing Credit properties do not unfairly penalize residents seeking to further their education.
The Act would also prohibit discriminatory approval and contribution requirements that can prevent developments from moving forward and help ensure that homeless youth are not disqualified regardless of whether they were homeless before becoming adults.
5. SIMPLIFIES LIHTC
The AHCIA would provide more resources for affordable rental housing development, increase the financial feasibility of development products, and simplify the LIHTC. It would essentially increase a property’s maximum LIHTC allocation, allowing a LIHTC property to generate more equity and make new construction or rehabilitation of an existing property more financially feasible.
Through financing these affordable homes, AHCIA would go a long way in assisting the millions of low-income households who are cost-burdened, cannot find affordable housing, or are at risk of homelessness.
ADDRESSING THE AFFORDABLE HOUSING CRISIS
The Affordable Housing Credit Improvement Act would substantially contribute toward addressing the affordable housing crisis in the short term and, more importantly, would set the stage for long-term recovery. If the AHCIA bill is passed, Congress would not only address the housing needs of America’s lower-income households by financing millions of additional affordable rental homes but would also positively impact the nation’s economic well-being and help counteract the economic damage done by the pandemic.