Extending and enhancing the Low Income Housing Tax Credit (LIHTC) Program would help WA add 1,700 affordable housing units in 2024
WASHINGTON, D.C. – Today, the U.S. House of Representatives passed a bipartisan tax package that includes significant improvements proposed by U.S. Senator Maria Cantwell (D-WA) to the Low Income Housing Tax Credit program.
Once the legislation is approved by the Senate, and signed by President Biden, these improvements would fund an additional 1,700 units of affordable housing in Washington state in 2024 alone.
“Tonight’s strong bipartisan vote by the House of Representatives is a huge show of support for building more affordable housing,” Sen. Cantwell said. “I will be pushing to ensure swift passage of this legislation in the Senate because once enacted work can begin on over 200,000 affordable housing units over the next two years alone. This credit supports nine out of ten affordable housing projects across the country and expanding it is crucial to helping cost-burdened renters and tackling our nation’s housing supply crisis.”
The full Senate may take up the bill as early as next week.
Since 1986, the Housing Credit has paid for 90% of the federally-funded affordable housing construction across the country, and has financed over 3.8 million affordable homes, including more than 100,000 in Washington state.
The package lowers the requirement for bond funding from 50% of a project to 30% of a project for developers to receive the tax credit, marking the first reduction in the bond test in 35 years. According to the Washington State Housing Finance Commission, this will allow the state to issue millions more worth of bonds and build nearly twice as many units as expected -- an additional 1,500 units of housing financed in 2024.
The package also restores a 12.5% tax incentive increase that originally expired in 2021. According to the Washington State Housing Finance Commission, this improvement will allow Washington state to fund 222 more affordable apartment units in 2024, and 600-650 units over three years. The increase will help the state allocate more funding for housing for the lowest income and most vulnerable people in Washington state, especially the homeless.
Sen. Cantwell has long advocated for the need to increase the availability of affordable housing and is the leading LIHTC advocate in the Senate – she worked hard behind the scenes to make sure these improvements were included in the final agreement. In 2021 and in 2023 she introduced the Affordable Housing Credit Improvement Act, along with Rep. Susan DelBene (D-WA, 01). Sen. Cantwell led efforts to build a bipartisan, bicameral coalition in support of that legislation, which is now joined by 242 Members – 45% of the entire Congress – evenly divided between Democrats and Republicans. Provisions of that Act were adopted in the deal announced today.
Since its creation, the Housing Credit has helped build or restore over 100,000 affordable homes in the State of Washington. The economic activity that the credit generated has supported nearly 170,000 jobs and generated more than $19 billion in wages.