Affordable Housing Finance's Donna Kimura reports on the introduction of legislation that would create a middle-income housing tax credit (MIHCT), modeled after the low-income housing tax credit (LIHTC).
The legislation, introduced by Sen. Ron Wyden (D-Ore.), would help create rental homes for families with incomes between 60% and 100% of the area median income, a population that wouldn't qualify for LIHTC properties.
“In my state and nationwide, affordable housing is key to climbing the ladder of economic mobility,” Wyden said in a statement. “The bottom line: America’s housing policy needs a remodel. It should start by using proven tools to develop new homes for Americans earning low and moderate incomes. This new tax credit will work hand in hand with the tax credit for low-income housing, which has been a huge success for decades.”
Like the LIHTC model, the federal government would allocate credits to states based on population. For 2017, the allocation would be $1 per capita, with a $1.14 million small-state minimum. Housing authorities would then follow a competitive process to allocate the tax credits to developers for individual projects, either new construction or rehabilitations, according to Wyden, Senate Finance Committee ranking member.