Workforce Housing Tax Credit Introduced in Congress
Earlier this month, Senate Finance Committee Chairman Ron Wyden (D-OR), Senator Dan Sullivan (R-AL), and Representatives Jimmy Panetta (D-CA) and Mike Carey (R-OH) jointly introduced the Workforce Housing Tax Credit (WHTC) Act. The proposal aims to increase the supply of affordable housing for middle-income families, generally deemed as those who earn too much to qualify for low-income affordable housing and not enough to afford housing near where they work.
The WHTC would build on the Low-Income Housing Tax Credit (LIHTC) program by providing additional tax credits that can be used to build affordable housing for tenants between 60% and 100% of area median income, or transferred to LIHTC for tenants generally below 60% of area median income. Similar to the LIHTC program, the WHTC would defer to state and local housing authorities for project selection and hopes to utilize public/private partnerships for an infusion of private capital. The proposal expects to offer considerable flexibility to states by allowing their housing finance agencies to transfer their middle-income allocation to LIHTC at any time and allow for the combination of both tax credits. Also similar to LIHTC, the tax credits would be provided to developers over a 15-year period, with a 15-year compliance period and 30-year extended commitment.
Advocacy groups such as the Real Estate Roundtable and the National Multifamily Housing Council have already expressed support for the bill.
“Tax policy should support and encourage private sector investment that boosts the supply of affordable and workforce housing. The Workforce Housing Tax Credit Act would build on time-tested tax incentives like the low-income housing tax credit and further facilitate the conversion of underutilized, existing buildings to housing. We welcome this positive step forward for our nation’s housing supply.”
– Jeffrey DeBoer, Real Estate Roundtable President and CEO
Sources: United States Senate Committee on Finance, Real Estate Roundtable, National Multifamily Housing Council, Congressional Research Service
- Carey M. Heyman, CPA
- Managing Principal of Industry - Real Estate
- CliftonLarsonAllen LLP
- Century City (Los Angeles)
Carey is the Managing Principal of the Real Estate Industry at CLA. He is a trusted advisor with close to 20 years of experience providing accounting, assurance, tax, and consulting services to real estate industry owners, operators, family offices, developers and syndicators. Carey has a strong track record of helping clients build and retain capital by leveraging tax- and cost-saving strategies and employing tax credits and incentives. He also consults with high net worth individuals, large family groups, and owners of closely-held businesses on all aspects of tax planning, estate planning, and retirement planning.
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