NAA/NMHC recommended that policymakers take a three-pronged
approach to meet housing affordability challenges, namely new
development, preservation and rehabilitation. The industry called on
Congress to pass legislation introduced by Senators Cantwell (D-WA)
and Hatch (R-UT) that would expand the Low-Income Housing Tax
Credit (LIHTC) by 50 percent and enable the program to serve families
earning up to 80 percent of area median income, among other
improvements. We also strongly favor legislation Senator Wyden (D-OR)
introduced last year to establish a Middle-Income Housing Tax Credit
(MIHTC). A complement of measures to expand and improve LIHTC,
MIHTC is designed to benefit populations earning below 100 percent
of area median income. NAA/NMHC worked with Senator Wyden on
the MIHT C bill in 2016 and are looking forward to its reintroduction
this Congress.
Although the Finance Committee is focused on tax policy, our
statement also recommended that Congress consider other proposals to
address housing affordability. We noted that if Congress were to overhaul
Fannie Mae and Freddie Mac, it must maintain an explicit federal
guarantee to ensure continued capital availability to the multifamily
sector. Additionally, Congress should maintain the FHA’s multifamily
programs and continue to support other federal housing assistance
initiatives, including Section 8 and the Rental Assistance Demonstration
Program. Finally, we called on Congress to urge the Department of Labor
to reexamine and modify its Davis-Bacon methodology to avoid
exacerbating housing construction costs.
The Finance Committee hearing provided NAA/NMHC with the
opportunity to highlight just-released research concluding that the nation
will need 4.6 million new apartments by 2030 to meet surging demand.
We were also able to highlight key barriers inhibiting the production of
new apartments, including land costs, zoning laws, entitlements,
regulations, construction and labor costs, impact fees, and capital
availability. The bottom line is that policymakers at all levels of government
must recognize that addressing local housing affordability needs requires
a partnership between government and the private sector.
Affordability has been a longstanding problem in housing. The total
share of cost-burdened apartment households (those paying more than
30 percent of their income on housing) increased steadily from 42.4
percent in 1985 to 54.8 percent in 2015. Also during this period, the
total share of severely cost-burdened apartment households (those paying
more than half their income on housing) increased from 20.9 to 29.2
percent. This housing cost burden also places pressure on a household’s
ability to pay for basic necessities, including food and transportation, and
ultimately impacts their future financial success.
This issue is not unique to households receiving federal subsidies and,
in fact, is encroaching on the financial wellbeing of households earning
up to 120 percent of area median income. Consider that the median
asking rent for an apartment constructed in 2015 was $1,396. For a renter
to afford one of those units at the 30 percent of income standard, they
would need to earn at least $55,840 annually. As a basis of comparison,
the median household income in 2015 was $56,516.
www.aamdhq.org
AUGUST 2017 • TRENDS | 31