Two key provisions of the Affordable Housing Credit Improvement Act (AHCIA) have been included in a bipartisan tax agreement.
Following intense Congressional negotiations, the agreement calls for a temporary restoration of a 12.5% allocation increase to the low-income housing tax credit (LIHTC) as well as a temporary reduction of the 50% bond test to 30% for 2024 and 2025.
These changes have been the top priorities for LIHTC advocates for several years.The restoration of 12.5% increase in 9% LIHTC allocations for 2023 through 2025 and the reduction in the private-activity bond financing threshold to 30% in 2024 and 2025 would finance an additional 202,573 affordable rental homes, estimates Novogradac, an accounting and advisory firm.
If enacted, the tax bill would represent the largest increase in affordable rental housing resources since 2000, says Peter Lawrence, director of public policy and government relations at Novogradac.
If Congress were to extend these policies for a full 10 years, Novogradac estimates that an additional 912,610 affordable rental homes would be financed.
Sen. Maria Cantwell (D-Wash.), a lead sponsor of AHCIA, calls the move the “biggest investment in housing in 35 years.”
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