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Middle-Income Housing Tax Credit Legislation Introduced in Congress

Thursday, December 7, 2023 - 11:48AM

Bipartisan legislation to create a middle-income housing tax credit (MIHTC) was introduced today in both chambers of Congress. Sens. Ron Wyden, D-Oregon, and Dan Sullivan, R-Alaska, introduced the Workforce Housing Tax Credit Act in the Senate, while Reps. Jimmy Panetta, D-California, and Mike Carey, R-Ohio, introduced an identical bill in the House of Representatives. The legislation would mirror the low-income housing tax credit (LIHTC) and empower state housing finance agencies to allocate credits to developers through a competitive process.
 
Credits would be allocated to states based on population, beginning at $1 per capita in 2024 with a small-state minimum of $1.5 million. New buildings would be eligible for 50% of the cost of the building over the lifetime of the credit. Rehabilitated and bond-financed buildings would have a credit equal to 20% of the cost of the building. To qualify for the credit, at least 60% of the building’s units would be required to be occupied by individuals with incomes at 100% or less of the area median income (AMI), with rents restricted to 30% of the designated income. Credits would be provided over a 15-year period with a 15-year compliance period. Novogradac estimates the legislation would finance approximately 344,000 affordable rental homes. Supporters of the legislation also released a one-page summary of the bill.

The LIHTC, MIHTC and other housing incentives will be the focus of the Novogradac 2024 Affordable Housing Developers Conference, Jan. 18-19, 2024, in Fort Lauderdale, Florida.

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