WASHINGTON, DC-The National Housing Trust Fund, established in 2008 but still languishing in Congress for want of funding, may be remaining on the sidelines for another legislative session. Right now it is part of the Senate’s extender bill--a bill better known to the commercial real estate industry as the vehicle that could still usher in a change in carried interest tax characterization.
But while the real estate industry is dreading passage of an extender bill that has been altered to include a carried interest provision, affordable housing advocates are dreading another possibility: that the extender bill won’t pass at all. If it doesn’t, Sheila Crowley, president of the National Low Income Housing Coalition, tells GlobeSt.com, the NHTF will remain in limbo. “And we will go back to the drawing board to figure out how to make it work.”
It has been a long slog so far. National Housing Trust Fund was passed in July 2008 with a mission to build, preserve and rehabilitate 1.5 million affordable rental homes for very low-income households. It was originally authorized with a dedicated funding stream from assessments on Fannie Mae and Freddie Mac. However when the GSEs were placed in government conservatorship, this funding source was taken off the table.
Even if the GSEs had been able to contribute, those revenue streams were never intended to be the sole source of funds. The legislation establishing the NHTF, in fact, allows Congress to direct any appropriations, transfers or credits into the NHTF.
A bill funding the NHFT passed the House with sufficient offsets. These measures and offsets are in the Senate version now waiting to be passed, Crowley says.
Specifically, the extenders bill contains $1 billion for the NHTF, $65 million for project-based vouchers to be used in NHTF units, and provisions to extend the Low Income Housing Tax Credit exchange program for one year. It also extends the placed in service deadline for the Gulf Coast’s Gulf Opportunity Zone tax credits. All of these items have been fully offset by cuts elsewhere.
Perhaps more importantly, there are several long-time Republican supporters of the measures. “We have heard some grumblings about the new spending in the bill but we have not heard specific objections to the trust fund,” Crowley says.
When Congress returns from the Thanksgiving recess on November 29, the bill could move as a standalone bill or as part of a larger tax bill that will deal with the expiring Bush tax cuts--if it moves at all, that is.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
