July 13, 2022
Ways & Means holds housing hearing
During a July 13 House Ways & Means Committee hearing focused on the challenges of increasing housing costs, Democrats defended housing assistance in the American Rescue Plan Act (ARPA) and the proposed Low-Income Housing Tax Credit (LIHTC) expansion in the House-passed Build Back Better Act (BBBA). Republicans attributed the current inflation crisis to the $2 trillion in ARPA spending — continuing the arguments against the law and new proposed spending they expressed during a June hearing with Treasury Secretary Yellen, further fueled by today's report that consumer prices were up 9% in June over a year ago — and criticized the proposed Net Investment Income Tax (NIIT) expansion to pass-throughs in Senate reconciliation bill discussions.
In an opening statement, Chairman Richard Neal (D-MA) said housing costs are escalating, through home prices and rental costs; as homeownership is slipping out of grasp, competition builds up in the rental market; and "to make matters worse, private equity has muscled its way into the housing market." He said LIHTC is "the single largest federal investment in the supply of affordable housing" and House Democrats have proposed an expansion of the program to increase the availability of housing credits and enable the program to do more for those most vulnerable. (The House-passed BBBA included $11 billion in LIHTC provisions, including an increase in state allocations.)
Neal also said the Neighborhood Home Investment Act, which would establish a new business-related tax credit to finance home building and rehabilitation in neighborhoods that meet certain eligibility criteria relating to poverty rates, income, and home values, "would help people afford homes in low- and middle-income communities and revitalize communities suffering from disinvestment."
In his statement, Ranking Member Kevin Brady (R-TX) noted the report of the 9% year-over-year inflation increase and said, "Rather than change course, Democrats in Congress continue to push for tax hikes that hit families, small businesses, homebuilders, developers, and skilled trades businesses the hardest. Contrast today with results in the two years after Republican tax cuts: Then, low inflation, strong real wage growth, and high housing affordability."
Additional information is also available in the attached Tax Alert.
Ways & Means housing hearing