U.S. Senator Maria Cantwell (D-WA) recently introduced legislation aimed at increasing the use of the low-income housing tax credit that hopes to reinvigorate the development of low-income housing. The Job Creation and Affordable Housing Act, co-sponsored by Senators John Kerry (D-MA) and Barbara Boxer (D-CA), would jump-start private investment in the Low Income Housing Tax Credit (LIHTC), which finances 90 percent of affordable housing projects in the United States. Proponents hope that the legislation will spur more development of affordable rental housing for seniors and others that need access to low income housing
“In good times, we had a public-private partnership that worked,”Senator Cantwell said. “But in a severe recession, we have seen the private part of this partnership freeze up. The result is thousands of stalled housing projects and the loss of tens of thousands of private sector jobs. This bill gets these projects moving again with an influx of private investment, stimulating our local economy and lessening the impact of the economic downturn on our most vulnerable populations.”
Investors have been discouraged for the credit as the financial crisis affected the availability for capital to fund low-income housing development. The bill provides incentives such as an increase from from 1 to 5 years the credit’s carryback period and requires that refunds be reinvested in low-income housing projects and makes more of the credits eligible for the Tax Credit Exchange Program created by the 2009 American Recovery and Reinvestment Act (ARRA). The bill contemplates that the programs will foster job creation in the small business sector, particularly in the construction industries, including carpenters, roofers and other trades.