The July 20 Senate Committee on Finance hearing, “The Role of Tax Incentives in Affordable Housing,” highlighted the importance of the Low Income Housing Tax Credit program, some of its weaknesses, and ways to use the tax code to preserve and expand the nation’s affordable housing supply.

Benson “Buzz” Roberts, president and CEO, National Association of Affordable Housing Lenders, testified on the efficacy of the LIHTC program, which he said has built 3.6 million homes since its inception, “about 130,0000 annually, which is virtually all of the affordable production over the last 35 years and it is equivalent to about one-third of all comparably rent-priced multifamily housing in the United States.

Regarding the Affordable Housing Credit and Improvement Act, which LeadingAge strongly supports, Mr. Roberts called out the bill’s provision to address right of first refusal and qualified contract issues. Like NAAHL, LeadingAge supports the bill’s provisions to restore the temporary 12.5% allocation increase of the Housing Credit, increase state Housing Credit allocations by 50% over two years, reduce the private activity bond financing requirement from 50% to 25%, and to reform the qualified contract and right of first refusal provisions in order to preserve affordability and extend nonprofit control of the properties.

Many LeadingAge members have had their Housing Credit properties wrested from them, or attempted to be wrested from them, or have gone through what could be described as extortion to retain ownership of their Housing Credit properties after year 15. Where vague, AHCIA would clarify current right of first refusal provisions and would change the right of first refusal to a purchase option for new contracts.

In addition to fixes in AHCIA, Senate Finance Chair Ron Wyden’s” Decent Affordable, Safe Housing for All (DASH) Act” would address qualified contract and right of first refusal issues.

Senator Benjamin Cardin (D-MD) asked hearing witnesses how Congress can ensure that tax incentives and other resources meet the unique and growing needs of older adults. Andrea Bell, executive director of Oregon Housing & Community Services (and also testifying on behalf of the National Council of State Housing Agencies), said that while all populations lack the affordable housing they need, the gap is particularly difficult for older adults. Ms. Bell urged enactment of the AHCIA and the LIFELINE Act, which would allow the use of state and local recovery funds to fill financing gaps in LIHTC developments.

Committee Ranking Member Todd Young (R-IN) joined the chorus. “When I travel across the state of Indiana, I hear from every community about the importance of affordable housing,” Senator Young said. Senator Young, is an original cosponsor of AHCIA as well as Senator Cardin’s Neighborhood Homes Investment Act, which seeks to increase homeownership opportunities in struggling communities.

Senator Maria Cantwell (D-WA), the lead Senate sponsor of AHCIA, said, “it is so frustrating that we cannot get this done. I just want to write on a billboard, ‘It’s Supply!’”

Watch a webcast of the hearing here.