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A loose alliance of banks, state officials and business groups is pushing for a permanent extension of a low-income housing tax credit enacted during the financial crisis.
“Affordable housing is in demand everywhere,” he said.
Backers of the proposal include the National Council of State Housing Agencies and the Affordable Housing Tax Credit Coalition. The coalition’s members include Bank of America Corp., JPMorgan Chase & Co. and PNC Financial Services Group Inc.
Garth Rieman, a spokesman for the state agencies’ council, said the proposal was “a vital tool for producing and preserving affordable rental homes for people that need them.”
The proposal would maintain the current 9 percent credit rate floor for the low-income housing tax credit, which is the share of qualified development costs that can be written off annually for 10 years.
The tax break was established in a 2008 law (PL 110-289) and renewed last year (PL 112-240). The proposal also would create a 4 percent credit rate floor for the acquisition of existing housing units, meaning that portion of a multi-family dwelling’s cost that could be written off annually for 10 years.
According to lobbyists, a two-year version of Tiberi’s proposal carries a price tag of $50 million. It is part of a Senate package of tax break extensions (S 2260). An estimate for the permanent extension was unavailable.
Supporters say the bill would spur construction of 100,000 units each year. It would help to address a projected shortfall of 4.9 million affordable housing units needed to fully meet the demands 11.8 million low-income renters, according to a Harvard University study.