The severe lack of affordable rental housing continues to be a pressing challenge for communities across the country, especially those with high concentrations of low-income individuals, including veterans and seniors. No program has been as successful at creating affordable housing than the Low Income Housing Tax Credit (LIHTC), a public-private partnership with broad, bipartisan support. By encouraging private investment in the production and preservation of affordable housing, LIHYC has financed more than 3 million homes for low-income families. Unfortunately, development of affordable housing lags far behind the demand and availability of the tax credit. More than 11 million low-income households – roughly one in four renters – spend more than half of their income on rent.
Cinnaire urges Congress to enhance the credit by passing the Affordable Housing Credit Improvement Act (AHCIA). This bipartisan legislation will increase the allocation of credits by 50 percent, resulting in more than 400,000 additional affordable homes over the next ten years. The bill includes several additional reforms to enhance the effectiveness of this public-private partnership.
The New Markets Tax Credit (NMTC) program attracts private capital to some of the most distressed rural and urban communities across the country by providing a federal tax credit for impactful investments. With deep experience in investment in low-income communities, Cinnaire has brought more than $239 million to distressed communities through the NMTC program.
Absent Congressional action, the NMTC program will expire at the end of 2019. Cinnaire urges Congress to pass the New Markets Tax Credit Extension Act of 2019, which is H.R. 1680 in the House and S. 750 in the Senate. These bills would permanently extend the NMTC program and increase the annual allocation of credits available under this highly competitive and successful program.
The U.S. Department of Housing and Urban Development (HUD) operates several programs that are critical to increasing affordable housing for low-income residents. Unfortunately, federal housing programs have been chronically underfunded. Today, just one in four families eligible for federal housing assistance get the assistance they need.
Cinnaire urges Congress to fund programs that help make rents affordable by increasing rental assistance and helping local communities increase the supply of affordable housing. In particular, the HOME Investment Partnerships Program (HOME) is a proven, effective and locally-driven tool for helping communities meet the demand for affordable housing. Despite its success, the HOME program has been underfunded for years. HOME is critical to filling gaps in financing for the development of affordable housing, including many projects supported by LIHTC.
As a certified Community Development Financial Institution (CDFI), Cinnaire has received several awards from the Treasury Departments’s CDFI Fund through its Financial Assistance grants and the Capital Magnet Fund. These flexible sources of capital allow Cinnaire to empower our community partners to meet their needs. Cinnaire encourages federal lawmakers to increase funding for the CDFI Fund to $300 million, a $50 million increase over the Fiscal Year 2019 level, and to ensure that the Capital Magnet Fund continues to receive support as part of any GSE reform efforts.
The Community Reinvestment Act (CRA) continues to serve as a critical driver of community development and investment in low-income communities. Cinnaire recognizes the need for CRA regulations to reflect changes in the way banks do business, as well as the need to give banks more certainty with respect to their CRA activities. However, policymakers should be careful to ensure that any changes do not inadvertently hinder investment in affordable housing and community development. Cinnaire urges all three banking agencies with jurisdiction over CRA to adopt consistent rules that provide certainty for banks while avoiding policies that would discourage investment in the communities that need it most.
Since September 2008, Fannie Mae and Freddie Mac have been under Federal Housing Finance Agency (FHFA) conservatorship. These Government Sponsored Entities (GSEs) remain critical drivers of the creation and preservation of affordable housing in the United States. Any reform of GSEs should maintain this role by preserving the GSEs’ affordable housing goals, duty to serve requirements, and contributions to the Housing Trust Fund and Capital Magnet Fund.
Vice President, Policy, Research & Advocacy