Well, the November elections are behind us and as it turns out, once again, the pundits are fallible, and the electorate was full of surprises. When the 118th Congress is seated on January 3rd, 2023 the Republican’s will have a very small majority in the House and Democrats will again control the U.S. Senate. Whether it is a 50/50 split or a 51/49 majority will be decided, again, in Georgia on December 6th. Haven’t we ridden this train before?
This runoff election is important for several reasons, not least of which is how it will affect our end of year LIHTC agenda. If Senator Warnock wins the runoff and Democrats have a working Senate majority in 2023, it is more likely Republican’s will be open to an omnibus budget and accompanying tax package. If the current ratio persists the negotiations are a little more difficult as committees will continue to have a 50/50 split and thus no advantage for pushing legislation. Elections do have consequences and we await the results in Georgia to see which way the legislative pendulum swings.
All that said, the LIHTC agenda enjoys strong bi-partisan support as we continue to advocate for restoration of the 12.5% LIHTC allocation which expired last year, a reduction of the 50% bond financing test and other provisions that would result in housing production. A bi-partisan letter in the House, led by AHCIA champions Reps. Suzan DelBene (D-WA) and Dr. Brad Wenstrup (R-OH) urging the House leadership to include the LIHTC in any end of year tax package was co-signed by 28 Democrats and 26 Republicans. This was a very strong show of support for the LIHTC at a critical time and follows the release of a letter from the Action Campaign to the entire Congressional leadership urging action to address the housing crisis. I ask you to contact every member of the CA congressional delegation and ask that they support our LIHTC provisions in the year end package. With the make-up of the 118th Congress it is unlikely we will have an opportunity to address production through the tax code until perhaps 2025 so this may be our last opportunity for some time to advance the LIHTC from a resource perspective.
As for the next Congress, it will likely be heavy on partisan messaging and light on legislative activity. Assuming Rep. Kevin McCarthy can secure the 218 votes he will need to be elected Speaker, his ability to exercise the political acumen of his California predecessor may be curtailed by a Republican conference bent on investigating the Biden Administration and reducing spending. While we do not foresee a hearty legislative agenda in Congress, we are already working with the Biden Administration and Members of Congress on reducing the regulatory and economic burden on affordable housing production. At the same time, we are readying our legislative agenda for 2023 and preparing to build support for the next version of the AHCIA. We look forward to working with CHC and our colleagues around the country on that and other issues as we strengthen the LIHTC and work to increase affordable housing production.
So, please continue your advocacy as we work toward a successful end of the year and have a wonderful holiday season.
David