[Congressional Record Volume 144, Number 146 (Wednesday, October 14, 1998)]
[Senate]
[Pages S12577-S12578]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     LOW INCOME HOUSING TAX CREDIT

  Mr. D'AMATO. Mr. President, about a year ago, the distinguished 
Senator from Florida, Senator Graham, and I introduced legislation (S. 
1252) to increase the amount of low-income housing tax credits 
allocated to each state to reflect inflation since 1986, and to index 
this amount to reflect future inflation. Today, we have 64 additional 
cosponsors. In this time when the conventional wisdom is that 
everything is supposed to be so partisan in Washington, it is a very 
good testament about the importance of the low-income housing tax 
credit that S. 1252 has garnered the bipartisan support of two-thirds 
of the Senate.
  I guess we should not be surprised about this support. The housing 
credit has become an extraordinarily effective mechanism to encourage 
construction of affordable housing. Since its creation in 1986, the 
low-income housing tax credit has successfully expanded the supply of 
affordable housing and helped revitalize economically distressed areas 
throughout the United States. The credit has been responsible for 
almost 900,000 units of housing in the past decade. Nearly all new 
affordable housing today (98%) is constructed with the help of the 
credit. Without the credit, these units simply would not be available.
  Credits are allocated to each of the states on a formula based on 
population: $1.25 multiplied by the number of people in the state. Each 
state must adopt an allocation plan based on housing needs in that 
particular state. Then private developers compete for allocation of the 
limited amount of tax credit. This creates an environment where each 
state can encourage the type and location of affordable housing it 
needs. And the competition for limited amounts of credit means that the 
Federal Government gets more and better

[[Page S12578]]

housing for each credit dollar. Effectively, the low income housing tax 
credit is a block grant to each state, and each state uses market 
competition to maximize the amount and quality of the housing.
  In March, 1997, after an 18 month study of the program, the General 
Accounting Office reported on the many achievements of the program 
without finding any problems in need of legislative correction. In 
fact, the GAO study concluded that families living in housing built 
with the help of the credit had incomes that were lower than that 
required by statute.
  Unfortunately, the amount of credit that can be allocated each year 
has not been adjusted since the program was created in 1986. If the 
credit had been indexed for inflation since it was first enacted, the 
per capita credit amount would be $1.85 this year.
  Although building costs rise each year, as does the affordable 
housing needs of the nation, the federal government's most important 
and successful housing program is in effect being cut annually as a 
result of inflation. When the cap was first established, the credit 
would fund 115,000 units. Now it will fund between 75,000 and 80,000 
units. Despite economic prosperity in recent years, the shortage in 
affordable housing has become more, not less, severe. According to HUD, 
the number of households with crisis-level rental housing needs exceeds 
5 million.
  I had hoped that we would have been able to see the enactment of S. 
1252 this year. Twelve years of erosion in value of the credit should 
be enough. Unfortunately, it appears that this meritorious legislation 
will have to wait until next year. It is not often that we can find a 
proposal that is supported by a bipartisan two-thirds of the Senate, a 
majority of Republican governors, and a Democratic President. Given the 
need for additional affordable housing, the effectiveness of the 
credit, and its broad bipartisan support among elected officials at all 
levels of government, I am very hopeful that we will be able to make 
this legislation a priority tax item early next year when the new 
Congress convenes.

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