Letter to a new Administration and Congress

After a strenuous campaign season at many levels of government this year, it might seem hard to remember that there are, in fact, many shared priorities across states, communities, and partisan lines.

For tens of millions of Americans, housing is at the top of that list. And there are already bipartisan housing solutions on the table that could be moved forward in the early months of the new term. I urge the next Congress and administration to consider them carefully.

During and immediately after the pandemic, many households felt the bite of inflation in their grocery bill and at the pump, but now housing costs are the biggest driver of inflation. Working class Americans have viscerally felt the “stickiness” of housing costs as home prices and rents have skyrocketed and supply has dwindled. In the coming years, this household expense will be a major factor that will shape whether they feel economically better off.

In urban and suburban neighborhoods and rural communities all across the country, the ratio of income to housing costs has reached a tipping point. Housing cost pressures that used to only be felt in big coastal cities are now a monthly worry for families all over the country. A 2024 report by the Joint Center for Housing Studies of Harvard University concludes that half of all renter households – 22.4 million – are cost burdened. The National Association of Home Builders/Wells Fargo Cost of Housing Index, a respected private-sector data source, indicates that close to 40% of a typical family’s income is needed to pay the mortgage on the average new single-family home; that percentage leaps to more than 75% for low-income households.

While the data is clear, the only real way to understand this challenge is in the reality of the household finances of hard-working Americans. When a teacher in a rural community cannot afford to live in the same county as his students, and still has to pay half of his income for housing, the urgency of the housing affordability crisis comes into sharper focus. Or, when a nurse turns down a job in a community that desperately needs health care workers because she can’t afford the cost of housing in that community, we can better understand how housing costs have consequences.

When housing costs eat up so much of the income of average households, it hurts local and regional economies. Small businesses suffer because their customers are spending too much on housing and do not have income for goods and services. Major employers find it far more difficult to attract workers who cannot afford to live within commuting distance.

None of this should come as news. As a country, we have not built enough housing in recent decades. Dramatic increases in the cost to build, preserve, and operate housing in recent years make it even more challenging to meet the need. This requires a practical approach to tax and housing policies that incentivizes private investment and accelerates affordable housing development.

Thankfully, proven bipartisan approaches already exist. Three are worth noting: the Affordable Housing Credit Improvement Act (AHCIA), New Markets Tax Credit (NMTC) Extension Act, and Neighborhood Homes Investment Act (NHIA), all with backing across the country and across the political spectrum. For example, sponsors of AHCIA include Anna Paulina Luna (R-FL) and Sheldon Whitehouse (D-RI). They both know that LIHTC works. It leapfrogs over political divisions. It is cost-effective for taxpayers. And it is impactful for families and communities.

• The Affordable Housing Credit Improvement Act builds on the decades-long track record of the federal Low Income Housing Tax Credit (LIHTC), which has attracted private capital to develop and preserve 3.8 million rental homes. Last year, nearly half of the members of Congress signed on to support AHCIA in order to strengthen and expand the credit. If enacted, it would fuel an additional 2 million affordable homes beyond the LIHTC program’s current capacity.

• The New Markets Tax Credit Extension Act also builds on a long history of bi-partisan support and impact. Though generally thought of as an economic development vehicle, NMTC’s flexibility means that it can also be used by nonprofit developers to attract capital to build affordable for-sale homes. In fact, since 2022, a dozen Housing Partnership Network members have leveraged the NMTC to build 800 homes for low- and moderate-income buyers.

• Finally, the Neighborhood Homes Investment Act would create a new tax credit to help developers cover the gap between building costs and market prices for homes sold to low- and moderate-income families. It would mobilize private capital to build and rehabilitate 500,000 owner-occupied homes over the next decade and, in doing so, would help revitalize distressed urban, suburban, and rural communities – not just with new housing, but with businesses and jobs as well.

These three pieces of legislation have already risen above partisan politics. They have the backing of Democrats and Republicans alike. They are good for families, businesses, communities, and the local tax base. They can be scaled for national impact.

Housing Partnership Network and the developers and lenders that make up our membership, are deeply committed to creative solutions to the nation’s housing crisis. We believe that the American Dream starts with a place to call home and that there is much that we can accomplish together, even amid political divisions. A robust public-private approach to housing should be something we can all agree on.