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Tuesday, June 22, 2021

Proposed Legislation By Cantwell, DelBene Would Build Millions Of New Affordable Housing Units

Sen. Maria Cantwell (D-WA)

WASHINGTON, D.C. – As thousands of Washingtonians experience increasing housing insecurity and communities around the state face affordable housing shortages and high levels of homelessness, U.S. Senator Maria Cantwell (D-WA) and U.S. Representative Suzan DelBene (D, WA-01) have introduced legislation to increase investment in affordable housing, build tens of thousands of new affordable units around the state, and provide more resources and stronger protections for at-risk groups.

“The State of Washington has an affordable housing crisis, and our experiences are all too familiar for so many communities in every state around the country,” Cantwell said. “Too many people are paying too much money to keep a roof over their heads, and the COVID-19 pandemic has only made the crisis worse. This bill will strengthen and expand our nation’s most successful federal housing program to build more than 66,000 new affordable units around our state and more than two million nationwide over ten years. We know this program works. Now is a critical time to invest in it to fight back against our affordable housing crisis and make sure we’re not leaving families behind.”

“Our nation’s need for more affordable housing is at an all-time high because of the COVID-19 pandemic. Congress should leverage the proven success of the Housing Credit to build more affordable housing units that will help more families find a safe place to call home,” said DelBene. “This legislation has earned the support of a bipartisan majority of the House of Representatives in the past. Now it’s time to get it over the finish line and increase affordable housing production across the country.”

The Affordable Housing Credit Improvement Act of 2021 would expand and strengthen the Low Income Housing Tax Credit to produce more than 66,000 units of affordable housing around the State of Washington and better serve a number of at-risk and underserved communities.

In recent years, Washington state has experienced a severe housing affordability crisis. Between 2006 and 2015, the median income in the state increased three percent, but the median rent increased by 18%. Nearly 230,000 Washington households pay more than half of their monthly income on rent. Among extremely low-income renters in the state, 68% pay more half or more of their monthly income on rent.

These trends were further exacerbated by COVID-19, as thousands of Washingtonians faced a loss of work, while rent prices for affordable housing units mostly remained steady or even increased during the pandemic.

“Senator Cantwell and Representative DelBene’s deep understanding of this program is matched only by their dedication to making it even more effective,” said Steve Walker, Executive Director of the Washington State Housing Finance Commission. “With so many critical housing needs in our state and nation, Senator Cantwell and Representative DelBene’s leadership and perseverance are truly appreciated.”

Nationwide, the expanded Low Income Housing Tax Credit would build more than two million new affordable housing units over the next 10 years. The bill would achieve this by:

  • Increase the amount of credits allocated to each state. The legislation would increase the number of credits available to states by 50 percent for the next two years and make the temporary 12.5 percent increase secured in 2018—which has already helped build more than 59,000 additional affordable housing units—permanent. This expansion would help build an estimated 299,000 affordable housing units over the next decade.
  • Increase the number of affordable housing projects that can be built using private activity bonds. This provision would stabilize financing for workforce housing projects built using private activity bonds by decreasing the amount of private activity bonds needed to secure LIHTC funding. As a result, projects would have to carry less debt, and more projects would be eligible to receive funding. This stabilization would help build as many as 1.5 million new units over the next decade.
  • Improve the LIHTC program to better serve at-risk and underserved communities. The legislation would also make a number of improvements to the program to better serve veterans, victims of domestic violence, formerly homeless students, Native American communities, and rural Americans. Collectively these improvements would help build an estimated 222,000 new units over the next 10 years.

The Low Income Housing Tax Credit is the country’s most successful affordable housing program. Since its creation, it has built or rehabilitated more than 3.5 million affordable housing units—nearly 90 percent of all federally-funded affordable housing during that time. Roughly eight million American households have benefitted from the credit, and its activity has supported 5.5 million jobs and generated more than $617 billion in wages.

According to Harvard University’s State of the Nation’s Housing 2020 report, more than 30 percent of all households nationwide—37.1 million American households—spent more than 30 percent of their income on housing. More than 17 million of those households were “severely cost burdened,” spending more than half their income on housing. These statistics come at the same time the United States is facing a nationwide shortage of 6.8 million affordable rental homes.

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