Housing tax credit bill gains bipartisan support in Congress

Dive Brief:

There is bipartisan support in Congress for a bill that would provide tax credits to developers covering a portion of the cost of building or rehabilitating homes in struggling communities.
The Neighborhood Homes Investment Act, which aims to produce 500,000 starter homes over the next decade, has garnered the support of 100 members of the U.S. House and 24 members of the U.S. Senate, according to the Neighborhood Homes Coalition. The bill, introduced last year, has been backed by the NHC, which represents various advocacy organizations and trade groups in housing and real estate.
"The affordable housing crisis has touched every community in the country,” said U.S. Rep. Brian Higgins, D-N.Y., who authored the bill, in a press release. The bipartisan support for the bill “shows the desire for new tools to address the affordable housing shortage, invest in our neighborhoods, and create opportunities for first-time homeownership, especially among those who are historically left out," Higgins added.

Dive Insight:

Support for the new bill comes as cities and states throughout the U.S. grapple with an affordable housing crisis, in which the rising cost of buying and renting a home has become out of reach for many. A growing number of cities and some states have been loosening zoning requirements, making it easier to build and passing ballot measures that provide additional funding for the construction of affordable housing.

The Biden administration included more than $170 billion toward affordable housing in the Build Back Better bill, the spending package that failed to pass the U.S. Senate last year. The bill would have included billions for expanded rental assistance, the preservation of public housing and the construction and preservation of affordable housing units.

The administration in May also released an affordable housing plan, which, among other initiatives, would give cities and towns with reformed zoning and land-use policies higher scores for certain federal grants. It would also expand federal financing options for building and preserving factory-built homes, accessory dwelling units and small-scale developments.

The Neighborhood Homes Investment Act intends to help address the housing crisis by making it more attractive for developers to build “modestly priced homes” in communities with high poverty, low incomes and low home values, said NHC in a letter to congressional leaders on Monday. Developers would only be able to claim tax credits after construction is completed and an eligible homeowner occupies the home, the group added.

NHC estimated the bill would generate $100 billion in new investment, create nearly 800,000 jobs and generate $29 billion in federal, state and local tax revenue — more than its federally budgeted cost. The bill would also help address climate change by encouraging energy-efficient investment in compact communities with underutilized infrastructure and access to transit and revitalize high-poverty neighborhoods, the group added.

U.S. Senator Rob Portman, R-Ohio, said in a statement in the NHC press release that the bill “would give us a critical new tool in the fight against rising housing costs, drive investment for more homes in the communities that need it most, and work alongside other powerful tools.” He specified that such tools include the New Markets Tax Credit, Opportunity Zones and the Low-Income Housing Tax Credit.