VHFA Executive Director Maura Collins joined Representative Peter Welch at the future site of Juniper House in Burlington last week to promote the federal Moving Forward Act, a $1.5 trillion infrastructure package recently passed by the House of Representatives. As Representative Welch highlighted earlier that week, the bill would provide substantial investment into a broad community investment activities such as highways, public infrastructure, investments in schools, and broadband. Reflective of the important role affordable housing provides in community development, the bill would also significantly increase annual housing tax credits available to states as well as provide $100 billion for several other affordable housing programs.
"Job one -- let's get the virus under control,” remarked Welch. “But job two -- and we can't forget it -- let's rebuild America, let's invest. Let's invest in housing so when we are back we can have affordable, quality places that people can live in town close to jobs.”
The bill would permanently increase the amount of Low Income Housing Tax Credits (LIHTC), the largest single source of funding for affordable rental housing. The increase of the small state minimum allocation from $3,217,500 to $5,214,051 over the next two years would add around $9 million of additional affordable housing resources for Vermont in the first year, and $18 million each year after full implementation. This increase would bring an estimated additional 85 affordable housing units online each year.
In addition to funding increases, the bill would also add several improvements to the LIHTC program. The 4% or ‘bond’ tax credits, primarily used to fund rehabilitation projects, would be fixed at 4% instead of the current variable rate, providing affordable housing developers with a more stable and substantial source of funding. It would also expand the types of projects that are eligible for a ‘basis boost’, or an increase in the maximum number of credits a project can receive, adding boosts for projects in rural areas and projects serving at least 20% extremely low-income tenants.
LIHTC-funded affordable housing has significant benefits for the communities it serves. A recent congressional study found that every year spent living in LIHTC housing as a child corresponded to a 3.5 percent increase in the likelihood of attending a four-year higher education program and a 3.2 percent increase in earnings as an adult. LIHTC apartment buildings can also positively impact the neighborhood in which they are built, increasing property values and tax revenue.
The Moving Forward Act would also add $100.6 in one-time funding for several other programs used for affordable housing Vermont, including the Public Housing Capital Fund, the Community Development Block Grant (CDBG) Program, the National Housing Trust Fund, and the HOME Program. The National Council of State Housing Agencies (NCSHA) has a full summary of the housing-related provisions of the bill. These efforts come as both the House of Representatives and U.S. Senate consider FY21 appropriation levels that will also impact resources available for affordable housing.
The Moving Forward Act is currently under review by the U.S Senate, where its passage appears uncertain. Affordable housing advocates continue to push to ensure housing provision similar to those contained in the Moving Forward Act remain a focus in any major relief funding legislation from either the U.S. Senate or Housing of Representatives.
Photo courtesy of Representative Peter Welch