A recently proposed middle-income housing tax credit (MIHTC) will be debated in the months ahead.
Sen. Ron Wyden (D-Ore.) has introduced legislation (S. 3384) to create the new program, which aims to complement the long-standing and successful low-income housing tax credit (LIHTC). While the LIHTC serves residents earning no more than 60% of the area median income (AMI), the proposed MIHTC would serve those who earn a little more than that and, frustratingly, just miss qualifying for a LIHTC apartment. Under the MIHTC plan, at least 60% of a development’s units would have to be rented to individuals with incomes less than or equal to 100% of the AMI.
In order to help guarantee that the MIHTC wouldn’t detract from investment in low-income housing, a state’s unused MIHTC dollars would be returned to the existing pool of funding for LIHTCs under the initial proposal.
For the most part, I think, the different members of the affordable housing industry sing from the same songbook. They stand united on a lot of issues, especially protecting the LIHTC program. At least in these early days, however, the MIHTC is raising strong, differing opinions. My two cents: I believe the proposed credit is an opportunity to gain more resources for affordable housing. And I believe it would help reach families shut out of the LIHTC program.
However, the respected leadership of the National Low Income Housing Coalition opposes the plan, saying federal resources should be targeted to those with the greatest needs, families with extremely low incomes. They point out that 75% of extremely low-income households are severely cost burdened, compared with 2% of median-income renters. It’s an important point worth discussing.
Others also raise the idea of just expanding the LIHTC program. Indeed, there’s legislation (S. 3237) that proposes “income-averaging” at LIHTC properties, which would allow some apartments to serve residents up to 80% of the AMI as long as all of the units averaged out to 60% of the AMI.
Let me know what you think. AHF will be watching the MIHTC proposal closely.
