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Bipartisan Legislation Introduced to Close Low Income Housing Tax Credit Loophole

Posted By Administration, Thursday, June 27, 2019

WASHINGTON, DC – Yesterday, Senator Ron Wyden (D-OR) and Senator Todd Young (R-IN) introduced a bipartisan bill, the Save Affordable Housing Act of 2019, that would make a critical correction to the Qualified Contract (QC) provision in Section 42 of the Internal Revenue Code that will save thousands of Low-Income Housing Tax Credit (Housing Credit) properties from prematurely converting to market rate. Representatives Joe Negues (D-CO) and Jackie Walorski (R-IN) introduced companion legislation in the House of Representatives.

 

“The Low Income Housing Tax Credit has proven to be a critical tool for spurring investment in affordable rental housing and providing stability for low-income Americans, including veterans, seniors, and those with special needs,” Congresswoman Walorski said. “By maintaining the availability of affordable rental units, this bipartisan bill will ensure the program continues to give workers and families a better opportunity to achieve the American Dream.”

 

The Save Affordable Housing Act would a close a loophole that currently allows owners the ability to convert affordable housing units to market rate 15 years earlier than the program was intended. Since 2017, nearly 50,000 affordable units have been lost at an increasing rate due to QCs. The Save Affordable Housing Act would eliminate the qualified contract for Housing Credit properties receiving allocations after January 1, 2019.

 

“The lack of affordable housing is at crisis levels in communities all over America. At a time when we desperately need to build new affordable housing, we’re losing thousands of units per year to this loophole,” Senator Wyden said. “Saving existing affordable housing units is essential to any effort to address our housing crisis. This is a no-brainer.”

 

NALHFA applauds this bipartisan legislation aimed at preventing the premature loss of Low Income Housing Tax Credit and will continue to monitor any development on the legislation. Please contact Katelynn Harris at kharris@nalhfa.org for any questions or concerns.

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