It is always my goal to end any presentation or update on a positive note so I will discuss the recently reintroduced Affordable Housing Credit Improvement Act later in this update. Let us begin with the continuing drama of the debt ceiling, the deal that has been negotiated and the potential results of the agreement.
Maintaining his reputation as a deal maker, President Biden has negotiated a debt ceiling increase with Speaker Kevin McCarthy. We are just getting the details of the deal but, as expected, there are plenty of unhappy legislators on both sides (the definition of compromise) and the final terms of the agreement have yet to be debated in either the House or Senate. What appears clear is that it is a compromise between the demands and desires of both the President and House Republican’s and if agreed upon by the Congress, would be a significant win for Speaker McCarthy and his first real legislative accomplishment. It would also preserve many of the legislative initiatives the President won in 2021 and 2022 with the Bipartisan Infrastructure Bill, the CHIPS Act and the Inflation Reduction Act.
Of greatest concern to the affordable housing industry are potential cuts to non-defense and non-discretionary spending (translation: HUD appropriations). The proposal would level fund FY 2024 appropriations at FY 2023 levels and cap the FY 2025 appropriations at a 1% increase. For the HUD budget in FY 2024, this would result is a significant shortfall and necessitate cuts in programs just to sustain Section 8 and PBRA levels. Analysis on the actual funding levels is ongoing but it is obvious those that rely on assistance in the form of vouchers or other programs at HUD will be adversely affected by these cuts.
The proposal also claws back roughly $29 billion in COVID funding. Where this is coming from is still unclear so not sure how this might affect housing at this time.
The deal lays the groundwork for the House and Senate to pass all 12 appropriation bills at the levels agreed upon in the proposal. If they do not pass a budget, the resulting continuing resolution (CR) could have even more significant budget consequences for discretionary spending. Stay tuned for more on the debt deal.
Now for some good news. The 118th Congress version of the Affordable Housing Credit Improvement Act (HR. 3238, S. 1557) was introduced in the House and Senate on May 11th. In the House, in addition to the six lead sponsors (Reps. LaHood R-IL, DelBene D-WA, Wenstrup R-OH, Beyer D-VA, Tenney R-NY & Panetta D-CA) over 60 bipartisan Members joined on as original cosponsors. In the Senate the bill was reintroduced by Senators Cantwell (D-WA), Young (R-IN), Wyden (D-OR) and Blackburn (R-TN). As of the drafting of this update the Senate bill now has 14 bipartisan cosponsors and the House has 94 with more in the queue, meaning there are over 100 cosponsors in the House. We are attempting to maintain an even split between Republicans and Democrats on the bill, thus a queue of Democrats waiting to be listed.
The bills are largely the same as previous versions with a few exceptions. The House and Senate versions have a “Sense of Congress” provision stating Congress should work with federal agencies to provide more data on affordable housing developments to the public. The Senate version also includes a “Sense of Congress” provision emphasizing the importance of discouraging discriminatory land use policies and removing barriers to affordable housing production. This is a major issue for Senator Young who is a leading proponent of YIMBY legislation.
Following the annual Affordable Housing Congressional Forum sponsored by the Housing Advisory Group and the Affordable Housing Tax Credit Coalition, teams hit the Hill to lobby on behalf of the AHCIA, to great success. We have continued to add cosponsors to the bills with the goal of surpassing 218 bipartisan cosponsors in the House. We acknowledge that to have any of the AHCIA provisions included in any tax vehicle this year, we must demonstrate strong bipartisan support. We have significant champions for the LIHTC, including Ways and Means Chairman Jason Smith (R-MO) and Finance Committee Chairman Ron Wyden (D-OR), both of whom spoke eloquently on the need for more affordable housing at the HAG/AHTCC meeting.
So, this is my call to action for the members of the CHC. We need you to get to members of the CA congressional delegation and get them on board as cosponsors of the AHCIA. Specific emphasis should be on Republican Members to demonstrate support for affordable housing legislation to Chairman Smith and the House Leadership. We can get a win this year, but it will take a very strong bipartisan showing.
Thank you and have a great summer.
David