The National Low Income Housing Coalition (NLIHC) said in a statement today it is pleased to have Sen. Ron Wyden (D-OR) prioritizing solutions to the affordable housing crisis. However, the group’s president, Diane Yentel called his proposed Middle Income Housing Tax Credit (MIHTC) program “a misguided and wasteful use of federal resources” in a statement opposing the proposal.

Wyden proposes to create a new federal tax incentive to encourage the development of housing affordable to households earning the area median income (AMI). Sixty percent of the units would be targeted to households earning median income, while the remaining forty percent of units would have no income targeting at all, according to the NLIHC.

Yentel said in a statement, “Given the growing affordable housing crisis, bold action is needed to serve more families in need. New federal resources must be targeted to serve those with the clearest and greatest needs – families with extremely low incomes. If enacted, Wyden’s bill would divert much-needed resources to higher-income households who, the data show, do not face significant housing challenges. Just 2 percent of middle-income renters nationwide are severely cost burdened, compared with 75 percent of the poorest renters paying more than half their income towards their rent.”

According to NLIHC’s report, The Gap: The Affordable Housing Gap Analysis 2016the greatest need for affordable housing is primarily concentrated among extremely low-income renters who earn no more than 30 percent of AMI. America’s 10.4 million extremely low-income renter households face a shortage of 7.2 million affordable and available apartments. For every 100 extremely low-income renter households, there are 31 affordable and available rental homes. These households include seniors, people with disabilities and families with children who struggle to keep a roof over their heads.

Because of this shortage, 75 percent of extremely low-income households are severely cost burdened, paying more than half of their income towards their rent each month.

In comparison, just 2 percent of median-income households are severely cost burdened nationwide and there is an excess of homes affordable and available to them. For every 100 median-income households, there are 104 homes affordable and available. Rental housing is most often developed for median and upper income households, without a need for federal tax incentives.

National Low Income Housing Coalition Opposes Middle Income Housing Tax Credit Act of 2016

by Banker & Tradesman time to read: 1 min