[Congressional Record Volume 150, Number 71 (Wednesday, May 19, 2004)]
[Extensions of Remarks]
[Page E913]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         COSPONSORSHIP OF HOMEOWNERSHIP TAX CREDIT LEGISLATION

                                 ______
                                 

                          HON. XAVIER BECERRA

                             of california

                    in the house of representatives

                        Wednesday, May 19, 2004

  Mr. BECERRA. Mr. Speaker, the low-income housing tax credit created 
by Section 42 of the Internal Revenue Code, commonly known as the 
rental credit, is responsible for the production of more than one 
million affordable housing units valued at over $100 billion since 
1987. Because of its tremendous success, the Bush administration and a 
bipartisan group of Members have proposed the creation of a new credit 
modeled on the rental credit and targeted at creating affordable 
housing for purchase by low- and moderate-income families. Concerns 
have been raised, however, that a homeownership credit, not properly 
crafted, could have unintended, negative consequences on the highly 
successful rental credit and on the very low-income Americans who 
benefit from the housing produced by it.
  Until today, these concerns have led me to withhold my support from 
H.R. 839, the ``Renewing the Dream Tax Credit Act,'' which was 
introduced early last year by the gentleman from Ohio, Mr. Portman and 
the gentleman from Maryland, Mr. Cardin. I have decided, however, that 
despite my continued reservations, I will add my name as a cosponsor 
today because the goal of increasing affordable homeownership 
opportunities is one I strongly support and a well-developed tax 
incentive could play an important part in that effort. Of course, I 
will work to ensure that the matters detailed below are considered 
carefully as the bill moves forward in Congress.
  My prime concern is that the legislation when enacted not adversely 
affect the existing rental credit. How might this happen? Put simply, 
in the event that rental credits are less attractive than homeownership 
credits to equity investors, pricing for rental credits may fall and 
the program may be less effective in meeting the demand for high 
quality, affordable housing.
  In addition, it is worth emphasizing that the affordable 
homeownership tax credit should be utilized in communities where a new 
subsidy is clearly needed to enable homeownership. In some parts of the 
country, the supply of new subsidized homes resulting from the credit's 
creation may endanger the economics of existing multifamily rental 
properties and cause the value of homes presently owned by low- and 
moderate-income households--the successful result of current affordable 
housing programs--to fall. We must be exceptionally wary of this 
possibility.
  Mr. Speaker, in closing, despite the reservations I have raised that 
deserve continued analysis and deliberation, I am pleased today to add 
my name as a cosponsor of H.R. 839. Increasing affordable homeownership 
opportunities for my constituents and families across America has long 
been a top priority for me and this proposal can certainly help us work 
toward that goal.

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