Rep. Cleaver Calls on House Leaders to Advance Bipartisan Incentives for Affordable Housing Before Year’s End

(Washington, D.C.) – Yesterday, U.S. Representative Emanuel Cleaver, II (D-MO), Ranking Member of the Financial Services Subcommittee on Housing and Insurance, called on House Leadership and the Ways and Means Committee to advance H.R. 3238, the Affordable Housing Credit Improvement Act, and H.R. 3940, the Neighborhood Homes Investment Act, before the House of Representatives enters into the Christmas recess period. The bipartisan legislation would incentivize the creation of affordable housing that is desperately needed in communities across the country.

In a letter to Speaker Mike Johnson (R-LA), Democratic Leader Hakeem Jeffries (D-NY), Ways and Means Chairman Jason Smith (R-MO), and Ranking Member Richard Neal (D-MA), Cleaver wrote:

“As you know, [the Low-Income Housing Tax Credit] is the most effective public-private federal tool for addressing our country’s shortage of affordable housing, which is why it is the most bipartisan bill in Congress with 186 cosponsors, evenly divided by Republicans and Democrats. That support, which includes 79 percent of the Ways and Means Committee, is both an indication of its efficacy, but also the incredible need for affordable rental housing nationwide.”

At the close of 2021, the United States had a shortage of 3.9 million homes due to underproduction, driving up housing costs in Kansas City and communities across the country. According to the National Low Income Housing Coalition, nearly one-in-four renters spend more than half of their household income on rent, forcing families to forgo other essentials such as childcare, medication, groceries, and more. Additionally, extremely low-income renters in the U.S. face a shortage of 7.3 million affordable and available rental homes, resulting in only 33 affordable and available homes for every 100 extremely low-income renter households, defined as households with incomes at or below the federal poverty guideline or 30% of the area median income.

To incentivize the construction of affordable housing and lower housing costs for renters and homeowners alike, the Affordable Housing Credit Improvement Act would support the financing of affordable housing by expanding and strengthening the Low-Income Housing Tax Credit—which has facilitated the creation of more than 3.7 million housing units since 1986 and proven to be one of the nation’s must successful affordable housing programs.

Experts estimate that the bipartisan bill would lead to the construction of an additional 2 million new affordable homes over the next decade by:

• Increasing the amount of credits allocated to each state. The legislation would increase the number of credits available to states by 50 percent for the next two years and make the temporary 12.5 percent increase secured in 2018 permanent—which has already helped build more than 59,000 additional affordable housing units nationwide.
• Increasing the number of affordable housing projects that can be built using private activity bonds. This provision would stabilize financing for workforce housing projects built using private activity bonds by decreasing the amount of private activity bonds needed to secure Housing Credit funding. As a result, projects would have to carry less debt, and more projects would be eligible to receive funding.
• Improving the Housing Credit program to better serve at-risk and underserved communities. The legislation would also make improvements to the program to better serve veterans, victims of domestic violence, formerly homeless students, Native American communities, and rural Americans. 

The Neighborhood Homes Investment Act would create a new federal tax credit for the development and renovation of 1-to-4 family housing in distressed urban, suburban, and rural neighborhoods. Currently, private development lacks in some urban and rural areas because the cost of purchasing and renovating homes is greater than the value of the sale price of homes. It is estimated that the creation of a tax credit that covers the cost between building or renovating a home in distressed areas and the price at which they can be sold would result in an additional 500,000 starter homes in under-resourced communities over the next decade.   

Rep. Cleaver’s official letter is available here.

Emanuel Cleaver, II is the U.S. Representative for Missouri's Fifth Congressional District, which includes Kansas City, Independence, Lee's Summit, Raytown, Grandview, Sugar Creek, Greenwood, Blue Springs, North Kansas City, Gladstone, and Claycomo. He is a member of the exclusive House Financial Services Committee and Ranking Member of the House Subcommittee on Housing and Insurance.