Skip to main content
Save One Million Affordable Homes!

By Ellen Lurie Hoffman, NHT Director of Federal Policy

Last month, we expressed concerns that the Trump Administration and congressional leadership’s tax blueprint did not explicitly call for retaining tax exemption for private activity bonds, which are critical for approximately half of all Low-Income Housing Tax Credit (Housing Credit) transactions, primarily preservation projects.  Despite verbal assurances that private activity bonds would be protected, last week saw that the House leadership’s bill “the Tax Cuts and Jobs Act,” (H.R. 1) would eliminate completely all private activity bonds, including multifamily Housing Bonds. This would lead to a loss of over one million affordable homes over the next decade!

This week, the Senate Finance Committee released its version of tax reform. Like the House version, the bill retains the Housing Credit, but unlike the House bill, the Senate also preserves the tax exemption for Private Activity Bonds, therefore retaining the ability to obtain the 4% Credit.

The lower corporate rate in both bills of 20 percent, down from the current top rate of 35 percent, will negatively impact investment in affordable housing without the offsetting adjustments that are in the Affordable Housing Credit Improvement Act sponsored in the House by Representatives Pat Tiberi (R-Ohio) and Richard Neal (D-MA) and in the Senate by Senate Finance Committee Chairman Orrin Hatch (R-UT) and Senator Maria Cantwell (D-WA). 

Now is the time to urge Members of Congress to restore private activity bonds, ensure that the Housing Credit is not damaged by other tax reforms, and further strengthen this effective program by including the provisions of the Affordable Housing Credit Improvement Act. Congress is expected to act very quickly on tax legislation, so contact your House Members and Senators today!

To Contact your Representative, call them via the Capitol Switchboard (202-224-3121)

The message: Reach out to Republican Representatives to:

  • Ask that they convey support to Speaker Ryan and Chairman Brady for Restoring Multifamily Housing Bonds to save one million affordable homes; and
  • Ask them to tell Speaker Ryan and Chairman Brady that they must also retain the Housing Credit's production power in a lower corporate tax rate environment by supporting the Affordable Housing Credit Improvement Act. 

To Contact Your Senator, call them via the Capitol Switchboard (202-224-3121)

The message: Reach out to Republican Senators to:

  • Thank them for retaining both the Housing Credit and Housing Bonds and urge them to tell Chairman Hatch to hold his ground by ensuring these programs are retained in a final bill which saves one million affordable homes; and
  • Ask that they convey support to Chairman Hatch for retaining the production power of the Housing Credit in a lower corporate rate environment by supporting the Affordable Housing Credit Improvement Act.


Working together, the Housing Credit and multifamily Housing Bonds are our nation’s most powerful tool for building and preserving affordable housing, which is desperately needed as Americans in urban, rural, and suburban communities struggle to afford to pay their rent. These resources are public-private partnerships central to the production and protection of affordable housing for families, seniors, people with special needs, veterans, and other needy populations.

Eliminating private activity bonds would devastate Housing Credit production. Multifamily Housing Bonds significantly increase Housing Credit production because their use triggers the so-called 4% Credit, which is not limited by the Housing Credit volume cap. Without bonds, this housing simply will not be built.  

As we have told you before, NHT has found that the dollar value of 4% Housing Credits allocated nationally has more than doubled since 2010.  We estimate that today, 4% Credits are responsible for about 50 percent of all Housing Credit production.  In recent years, many states have begun to utilize 4% Credits increasingly for preservation deals, which tend to protect affordable housing in economically challenged areas. Many state Qualified Allocation Plans are pushing preservation projects to the 4% Credit program, requiring applicants to prove that their deal will not work with 4% Credits before the HFA even considers funding them with 9% Credits.  Some states are seeing such an increase in usage of the 4% Credit program that they are hitting their cap.

Both the House and Senate tax bills would further impede Housing Credit production by not making programmatic changes to the Housing Credit to offset the negative impact the 20 percent corporate tax rate and other modifications to the tax system envisioned under both bills would have on investor interest in the Credit. In the House bill, the loss of tax-exempt multifamily Housing Bonds coupled with the 20 percent corporate tax rate and other tax changes will reduce Housing Credit production by as much as two-thirds.

Both the House and Senate bills also miss an opportunity to strengthen the Housing Credit by including the program modifications contained in the Affordable Housing Credit Improvement Act.This bipartisan legislation has the support of over one-quarter of the House of Representatives and two-thirds of the Ways and Means Committee and 22 Senators.

For more information on PABs or the proposed tax bill, please contact NHT’s Federal Policy Director, Ellen Lurie Hoffman, or follow her on Twitter at @EllenLHoffman.