- November 30, 2022
call to action: urge congress to strengthen the housing credit and bond programs before year-endAs Congress returns this week from the Thanksgiving break, it heads into the final stretch of the year with a long list of legislative to-do items. Now is a crucial time to encourage members to expand and strengthen the Low Income Housing Tax Credit as part of an end-of-year legislative vehicle.
At a time when construction costs and interest rates continue to rise, we need additional resources to ensure Colorado does not fall further behind in meeting its affordable housing needs. This November, Colorado voters approved Proposition 123 and several local ballot issues, which is a step in the right direction, yet many of these will still rely on leveraging the power of the Low Income Housing Tax Credit and Private Activity Bond programs to fully achieve the outcomes desired.
Specifically, we urge housing advocates to ask members of the Colorado Congressional delegation to support and encourage Congressional leadership to increase the Housing Credit by 50 percent — at a minimum restoring the 12.5 percent cut to the program — and lower the bond financing threshold to 25 percent.
On November 21, the ACTION Campaign, sent a letter to Congressional leaders on behalf of its membership – including CHFA and many stakeholders in Colorado – seeking action on these two key legislative priorities. Excerpts from the letter are included below to highlight helpful talking points and asks to share in your communications with delegation members:
- “Expand Housing Credit authority. We simply do not have enough Housing Credit authority to meet demand. Unfortunately, we have moved backward rather than forward in this regard. At the end of 2021, a small but meaningful increase in the Housing Credit expired, thus, in 2022 there were less Credit resources than there had been in the preceding years. This 12.5 percent increase had been in place since Congress struck a bipartisan agreement in 2018, but it expired at the worst possible time, given rising development costs. We (the undersigned organizations) call on Congress to increase the Housing Credit by 50 percent. At a bare minimum, Congress should reinstate the 12.5 percent cut to Housing Credit authority, adjusted for inflation.”
Of note: Colorado is already experiencing a reduction in the number of units available to support due to the expiration of the 12.5% increase, with approximately 100 fewer units supported this year due to fewer credits available for allocation.
“Enhance the use of existing Private Activity Bond (PAB) authority for rental housing production. An outdated requirement that at least 50 percent of the cost of rental housing properties must be financed with multifamily bonds to maximize Housing Credit equity is preventing states from getting the most out of existing PAB authority to finance affordable rental housing with the 4 percent Housing Credit. We (the undersigned organizations) call on Congress to lower the bond financing threshold from 50 percent to 25 percent to make more efficient use of existing PAB resources and significantly expand rental housing production.”
Of note: Colorado is the ninth largest issuer of Private Activity Bonds for multifamily housing nationwide. CHFA also uses PAB to support single family mortgage lending for first time homebuyers and manufacturing business finance. The estimated economic impact of PAB issued by CHFA is more than $8 billion across all programs. CHFA estimates that “lowering the financed by threshold” would allow an additional 700-800 multifamily units to be supported annually. Click here to view CHFA’s Community Investment using Private Activity Bonds (PAB).
Click here to view the full ACTION Network letter.
Thank you for your advocacy and outreach.
Colorado Congressional Delegation
Senator Michael Bennet
Senator John Hickenlooper
Congresswoman Diana DeGette
Congressman Joe Neguse
Congresswoman Lauren Boebert
Congressman Ken Buck
Congressman Doug Lamborn
Congressman Jason Crow
Congressman Ed Perlmutter