The country needs a renewed commitment to affordable housing production programs, including expansion of the Low Income Housing Tax Credit and enactment of the Neighborhood Homes Investment Act, argue LISC board chair Robert E. Rubin and former U.S. senator Rob Portman in a joint op-ed in The Hill. "Fixing the chronic shortage of affordable and available housing for low-income renters and first-time homebuyers requires immediate intervention and long-term commitment,” they stress.
The excerpt below was originally published on The Hill:
Congress can help make housing affordable — it just has to act
The Barrister Apartments in downtown Cincinnati, slated to open early next year, are a housing policy success story. Financed with federal Low-Income Housing Tax Credits, it is the first investment in affordable housing in the city’s central business district in more than two decades.
The project involves rehabilitating two vacant office buildings into rental apartments for service workers making no more than 60 percent of the area median income. Not only will residents have shorter commutes to work — saving time and transportation costs and cutting down on emissions — they’ll also save on rent, freeing up money for other important priorities, such as food, education or a down payment on a home.
As important as the Barrister Apartments will be for downtown Cincinnati and the families who will live there, it unfortunately accounts for only a tiny portion of the estimated 270,000 affordable apartments needed to serve Ohio’s most vulnerable families.
Ohio, like the rest of the nation, is facing an affordable housing crisis. It is estimated that there is a housing production gap of 3.8 million units nationwide and that nearly half of all renter households are considered “cost burdened,” meaning they spend more than 30 percent of income on rent. The production of new housing is on the decline, with inflation, rising interest rates, supply chain difficulties and elevated construction costs among the factors slowing down the construction of badly needed housing. The lack of housing construction is impacting not just renters who are paying more and more for fewer and fewer available units, but also first-time homebuyers seeking to find a foothold in the real estate market.
The country needs a thoughtful, persistent and renewed commitment to affordable housing production programs. The good news is that there is considerable bipartisan support in Congress to act.
The first step should be to expand the Low-Income Housing Tax Credit. Since its creation in 1986, the housing credit has financed nearly all affordable rental housing built in this country —3.7 million units of affordable housing, serving more than 8 million low-income households. Homes financed with housing credits, like Cincinnati’s Barrister Apartments, are generally required to be affordable to families earning less than 60 percent of the area median family income; in reality, they often serve Americans who are even less well-off. And the tax credit requires these properties stay affordable to low-income families for at least 30 years.
In early May, a bipartisan coalition of senators and representatives introduced the Affordable Housing Credit Improvement Act, with more than two dozen provisions to enhance and improve the housing credit. The bill would help to finance nearly 2 million additional affordable homes over the next decade, principally through provisions that would increase the supply of the credits while also making the credits easier to use alongside tax exempt bonds issued by states and municipalities. Congress temporarily increased the supply of the credits in 2018, but that legislative increase expired at the end of 2021. Without any action from Congress, much-needed affordable housing units that would have been built will not be, worsening the existing crisis.