2020 Elections Present New Opportunities for Affordable Housing in Any Scenario

Though the outcome of some key races remains unknown, the 2020 elections will certainly lead to a changed landscape for the Housing Credit and affordable housing programs and policies in 2021. With Vice President Joe Biden declared President-Elect, Democrats retaining control of the House, and control of the Senate not yet determined but hinging on run-off elections for both of Georgia’s Senate seats on January 5, the broad foundation of bipartisan support we have built for the Housing Credit will be as important as ever. Republicans only need to win one of the two run-off elections seats to retain control of the Senate while Democrats would have to win both, so we are preparing for a continuation of divided government while not discounting the possibility of unified Democratic control. In any scenario, there will be new opportunities to advance proposals to strengthen the Housing Credit through legislation as well as through regulatory action, as AHTCC Executive Director Emily Cadik also shared in Affordable Housing Finance.

The AHTCC looks forward to working with the Biden Administration and 117th Congress to ensure that affordable housing is a robust part of the policy agenda. Prior to the COVID-19 crisis, nearly 11 million renter households were spending more than half of their income on rent. Today, millions of workers have lost their livelihoods or had their wages reduced due to the crisis, and many impacted renters are becoming housing cost-burdened if they were not already. The need to expand and strengthen the Housing Credit to make a meaningful dent in this growing affordable housing shortage is more urgent than ever. Each day it is also becoming more imperative to provide rental assistance to help renters stay in their homes and for their properties to remain financially stable. According to estimates from the National Council of State Housing Agencies, when the Centers for Disease Control and Prevention’s eviction moratorium expires at the end of the year, renters will owe up to $34 billion in back-rent and more than 8 million households will be at risk of eviction.

The AHTCC is immediately working to engage the presidential transition team and congressional leadership and our champions, and will soon engage dozens of new and returning members of Congress and congressional staff. We will also take advantage of potential opportunities in the lame duck session of this Congress to advocate for affordable housing relief as part of any year-end legislation.

Prior to the election we provided an analysis of what the 2020 election outcomes could mean for affordable housing, which lays out many of the issues around which we now have more clarity. Below we have provided an initial summary of our outlook based on the current results, and will be providing more news, analysis, and advocacy resources and opportunities over the coming weeks and months.

The Outlook for Year-End Legislation in the Lame Duck Session

Earlier this week Senate Majority Leader Mitch McConnell (R-KY) stated his willingness to resume COVID-19 relief negotiations despite his prior resistance, stating that both a relief package and keeping the government funded past the December 11 deadline will be “top priorities for the Senate” which returns next week. He suggested that he and House Speaker Nancy Pelosi (D-CA) agree that an omnibus appropriations bill instead of a simple extension of the continuing resolution currently funding the government is needed. This could produce a somewhat broader year-end package that could also include other outstanding items. Such a package could also include additional tax provisions such as annual tax extenders, particularly those that cannot be as easily extended retroactively. President Trump will still need to sign this legislation into law, and it is expected the Administration will be part of this negotiation.

The various legal challenges and vote recounts currently being pursued by the Trump campaign could also impact the tone and agenda of the lame duck session. However it is unclear if or how a legal battle over the presidential race could alter congressional negotiations. The same is true for presidential and Senate results from Georgia, where there will soon be a recount of the presidential vote and in January two run-off Senate elections that will ultimately determine which party controls the Senate.

In the case that any broader year-end legislation does come together, the bipartisan support for the Housing Credit will be critical as we advocate to have the minimum 4 percent Housing Credit rate and possibly other priorities included, and we will provide additional information about advocacy as opportunities arise.

The Biden Administration

The Biden campaign has laid out a sweeping housing plan that calls for an investment of “$640 billion over 10 years so every American has access to housing that is affordable, stable, safe and healthy, accessible, energy efficient and resilient, and located near good schools and with a reasonable commute to their job.” The plan specifically calls for strengthening and expanding the Housing Credit with a new $10 billion investment, along with providing Section 8 housing vouchers to all eligible families, creating a new renters’ tax credit, and providing a new $100 billion affordable housing fund, among many other housing proposals. While the Biden housing plan is ambitious, the ability to implement many of the proposals will depend on support from Congress, which may be limited with a Republican-controlled Senate.

Even if legislative gridlock persists, there will be opportunities to strengthen the Housing Credit through the regulatory process, working with new leadership at agencies whose work impacts the Housing Credit, including the Treasury Department, Department of Housing and Urban Development (HUD) and the agencies that oversee implementation of the Community Reinvestment Act (CRA).

New leadership expected at the Office of the Comptroller of the Currency (OCC) is likely to change the course of current CRA reform efforts to better achieve the Biden Administration’s goal of “expanding and strengthening CRA to ensure that our nation’s bank and non-bank financial services institutions are serving all communities.” The OCC’s CRA rule issued earlier this year, which could have major negative impacts on Housing Credit investment, is now unlikely to go into effect in 2023 as currently required. The Federal Reserve’s new CRA reform proposal may instead serve as a more likely starting point for joint regulations from the three CRA regulators, and the AHTCC will work with the three agencies towards a joint proposal that supports affordable housing investment.

We will also continue to engage with the IRS to urge for the extension of key Housing Credit deadlines, effective program regulations regarding issues like income averaging and the ability to claim credits relative to the receipt of the Low-Income Housing Credit Allocation and Certification (Form 8609), and other guidance to streamline and strengthen the Housing Credit.

The 2021 Congressional Landscape and Housing Credit Legislation

If Republicans retain control of the Senate, we will likely see a continuation of legislative gridlock, as the Senate is unlikely to be willing to provide enough funding for Democratic priorities. However, there may still be areas of compromise, considering the narrow margins in the House and Senate, especially around must-pass items that could potentially serve as vehicles for other priorities. If Democrats do gain control of the Senate in the run-off elections, substantial investments in stimulus and infrastructure legislation, including affordable housing, are likely.

To prepare for any outcomes and potential legislative vehicles, we are beginning to work with our champions in Congress immediately to plan for the reintroduction of the Affordable Housing Credit Improvement Act (AHCIA) to expand and strengthen the Housing Credit, as well as to discuss potential changes to the legislation to take into account new policy needs as well as to position it as favorably as possible for advancement.

Congressional Leadership

The ability to advance Housing Credit priorities will depend not only on the ability for the House, Senate and White House to compromise around broader legislation, but also the priorities of congressional leadership. With Democrats retaining leadership of the House, long-time Housing Credit champion Congressman Richard Neal (D-MA) will remain Chairman of the House Ways and Means Committee, which has jurisdiction over the Housing Credit in the House of Representatives. House Speaker Nancy Pelosi (D-CA), another long-time champion of the Housing Credit, has stated her intention to remain Speaker in the next Congress. House Minority Leader Kevin McCarthy (R-CA) and House Ways and Means Ranking Member Kevin Brady (R-TX) are likely to stay in their roles as well, and neither have taken a public position on the Housing Credit.

With Senate control still unknown, we do not know whether Senator Mitch McConnell (R-KY) or Senator Chuck Schumer (D-NY) will take the helm as Majority Leader. Senator Mike Crapo (R-ID), who is a supporter of the Housing Credit and very steeped in affordable housing issues from his time leading the Senate Banking Committee, will become the top Republican on the Senate Finance Committee, which has jurisdiction over the Housing Credit in the Senate. Current Committee Chairman Chuck Grassley (R-IA) is term-limited in his role as the lead Republican. Ranking Member Ron Wyden (D-OR), a long-time affordable housing champion and a lead sponsor of the Affordable Housing Credit Improvement Act to expand and strengthen the Housing Credit, will remain in his role as the top Democrat on the committee. To the extent there are appropriate legislative vehicles, whether Senator Crapo or Wyden chair of the Senate Finance Committee, the two may find agreement with House Ways and Means Chairman Neal and the Biden Administration around bipartisan policies from the AHCIA and other policies to strengthen the Housing Credit.

Cultivating New Housing Credit Champions and Supporters

The Democratic leads on the AHCIA, Senators Maria Cantwell (D-WA) and Ron Wyden (D-OR), and Representatives Suzan DelBene (D-WA) and Don Beyer (D-VA), as well as Republican leads Senator Todd Young (R-IN) and Congresswoman Jackie Walorski (R-IN), are expected to continue their roles leading on Housing Credit legislation. However, the other two Republican leads on the Housing Credit are not – Senator Johnny Isakson (R-GA), who retired earlier in the year, and Congressman Kenny Marchant (R-TX), who did not run for reelection. The AHTCC will work with our partners in the ACTION Campaign and our supporters on Capitol Hill to solidify additional champions for the next Congress as we work quickly towards reintroducing the AHCIA.

In addition to cultivating new Housing Credit champions, we will need to educate many new members of Congress about our issues and replace many supporters. A significant number of co-sponsors, especially on the Republican side, will not be returning. Of the 11 Senate Republicans who co-sponsored the AHCIA, two lost their reelection campaigns and one retired. Of the 79 House Republicans who co-sponsored the AHCIA, 13 retired or resigned. Committee assignments will be made at the start of the new Congress, and it will be especially important to educate new members of key committees as well.

In a promising sign of the growing awareness of the need for affordable housing, several incoming members of Congress have already laid out policy goals related to affordable housing, which we will work to translate into concrete support in the next Congress. For example, incoming Senator John Hickenlooper (D-CO) has already called for an expansion of the Housing Credit, and that affordable housing be part of any major infrastructure package.

Learn More: AHTCC Election Impacts on Affordable Housing

On November 9, the AHTCC held a webinar on how the 2020 election may impact affordable housing policy. AHTCC leadership shared their analysis on the future of affordable housing policy. Speakers discussed the legislative agenda during the lame duck session and the next Congress, potential changes to congressional leadership, what we might expect from the Administration, and opportunities to strengthen and expand the Housing Credit.

If you weren’t able to join us and would like to view the webinar recording and access the slides, please email AHTCC Senior Policy Analyst Megan John at megan.john@taxcreditcoalition.org. Access is free for AHTCC members. For nonmembers, the fee is $100.

If you have any questions, or would like any assistance engaging with your members of Congress, contact AHTCC Executive Director Emily Cadik at emily.cadik@taxcreditcoalition.org or 202.935.1217.