WASHINGTON, DC,, Nov. 21, 2014 (GLOBE NEWSWIRE) -- In a letter sent to members of the 113th Congress this week, the A Call To Invest in Our Neighborhoods (ACTION) Campaign called on lawmakers to extend the minimum 9 percent Low-Income Housing Tax Credit (Housing Credit) rate for new construction and substantial rehabilitation and establish a minimum 4 percent rate for the acquisition of affordable housing before the end of the legislative session. The coalition of more than 900 national, state and local affordable housing stakeholders who signed the letter represent all 50 states, Washington, D.C. and Puerto Rico.
"The Housing Credit is the only significant source of new affordable housing and our most effective tool to combat the growing affordable housing crisis," said Ali Solis, senior vice president of public policy and corporate affairs at Enterprise Community Partners, Co-Chair of the ACTION Campaign Steering Committee. "Financing these homes has become more difficult, however, without minimum credit rates. We ask that Congress act quickly to make these changes that have minimal costs but substantial impacts on affordable housing development."
"The Housing Credit brings homes, jobs and financial returns to every state, as evidenced by the diverse array of signatories on the ACTION letter," said Barbara Thompson, executive director of the National Council of State Housing Agencies, Co-Chair of the ACTION Campaign Steering Committee. "We urge the 113th Congress to act now to further strengthen the Housing Credit by enacting these modest but important provisions that will help state Housing Finance Agencies and their partners respond to our country's increasing affordable rental housing needs."
The Housing Credit, America's main tool for financing affordable rental housing, has produced or preserved over 2.7 million affordable homes since it was created in 1986. However, while demand for affordable rental housing is at an all-time high, financing these homes has become more difficult. In 2008, Congress established a minimum 9 percent Housing Credit rate, but the provision expired at the end of 2013. Housing Credits are now tied to federal borrowing rates, which have sunk to historic lows. As a result, there is now 15 to 20 percent less Housing Credit equity available for any given property than Congress originally envisioned.
Though the ACTION Campaign believes the minimum 9 and 4 percent Housing Credit rates should be made permanent, a temporary extension of these provisions for at least two years would still significantly strengthen the Housing Credit at virtually no additional cost to taxpayers. Minimum 9 and 4 percent credit rates have previously enjoyed bipartisan support in Congress, most recently in April 2014 when they were approved in the Senate Finance Committee's Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act.