Gallego, Rounds Introduce Bill to Spur Affordable Housing Investments

The Bipartisan, Bicameral Affordable Housing Credit Carryback Act increases the Low Income Housing Tax Credit carryback period from one year to five years WASHINGTON — Senators Ruben Gallego (D-AZ) and Mike Rounds (R-SD) today introduced the bipartisan Affordable Housing Credit Carryback Act. The bill changes the carryback period from one-year to five-years for the Low Income Housing Tax Credit (LIHTC), which would provide greater flexibility for investors, strengthen the housing credit market, and encourage continued investment in affordable housing projects. “By providing more tax flexibility to builders and investors, our bipartisan bill will allow more housing to come online faster,” Senator Gallego said. “Arizona needs more housing, and it needs it now. That’s why I’m fighting to help increase supply and lower the cost of housing for Arizona families.” “Addressing housing supply challenges has been a central pillar of this Congress’s agenda. Making additional improvements to the low-income housing tax credit (LIHTC) would support that effort and fortify the credit as a strong tool for affordable housing development and rehabilitation,” said Senator Rounds. “I hear from constituents every day about limited access to affordable housing. Expanding the LIHTC carryback period from one to five years will provide investors necessary flexibility to improve our nation’s affordable housing supply.” Under current law, a LIHTC must be applied against an investor’s tax liability in the year it is received. Certain credits, however, are more flexible – allowing investors to apply them not only to their current year’s tax liability, but also to offset prior years’ tax liability. The Affordable Housing Credit Carryback Act would let LIHTC investors apply the credit to the past five years of taxes instead of just one. That makes LIHTC more competitive with other credits, gives investors more flexibility, and makes it easier for investors to keep funding affordable housing even during a recession, which is exactly when demand for cheap rental housing goes up but investors have less current tax liability to offset. “The Affordable Housing Credit Carryback Act will increase investment in the Low-Income Housing Tax Credit, our nation’s primary tool to finance affordable housing, at a time when it is sorely needed to address our nation’s affordability crisis,” said Affordable Housing Tax Credit Coalition CEO Emily Cadik. “We applaud Senators Gallego and Rounds for their leadership on strengthening this proven program to help meet a vast and growing need for affordable housing.” This legislation is an important step toward addressing the nation’s housing shortage and builds on Senator Gallego’s efforts to lower housing costs. He was a champion of the 21st Century ROAD to Housing Act, which included legislation introduced by the senator. Earlier this year, Senator Gallego also released a comprehensive housing plan, “ The Path Home: Rebuilding the American Dream and Restoring Housing Affordability ,” outlining additional solutions to build more homes, cut red tape, and bring housing costs down for working families. Click here to view the bill text.