S-5285-119
Read twice and referred to the Committee on Finance.
Sponsored by Amy Klobuchar (D-MN)
What it does
This bill would increase the per-capita and small-state minimum amounts of the federal Low-Income Housing Tax Credit that states receive to allocate to developers. It would also create a 150% eligible-basis bonus for units designed to meet accessibility standards in walkable areas, and require state housing agencies to ensure at least 40% of new low-income housing credit units over any 3-year period meet accessible design standards.
Who benefits
People with disabilities and older adults seeking accessible affordable housing, developers who build disability-accessible units (via the 150% basis bonus), state housing finance agencies (larger credit allocations), construction and building trades involved in affordable housing projects, and Supplemental Security Income recipients seeking affordable housing.
Who is hurt
Federal taxpayers and the federal treasury bear the cost of expanded tax credits; developers of low-income housing that does not meet the 40% accessibility threshold may face reduced credit allocations or compliance burdens; state housing agencies face new administrative requirements to track and enforce accessibility quotas; non-disabled low-income applicants could see somewhat reduced availability of standard (non-accessible) units if agencies prioritize accessible unit development.
Supporters argue
Supporters argue that only about 6% of the national housing supply is accessible while 26% of Americans have a disability, and that by 2060 one in four Americans will be over 65, creating urgent need for accessible affordable housing. They contend the credit increase and 40% accessibility set-aside would directly address a documented gap, allowing older adults and people with disabilities to remain in their communities rather than being relegated to institutional settings, citing findings that over 89% of older adults prefer to age in place.
Opponents argue
Opponents argue that mandating a 40% accessibility threshold on all state qualified allocation plans reduces state flexibility to address locally identified housing priorities and may not reflect actual local demand for accessible units in every market. They contend that increasing the per-capita credit amount by more than double (from $1.75 to $4.25, rising further with inflation and a 25% multiplier) represents a substantial and largely permanent expansion of a federal tax expenditure whose long-term cost has not been fully assessed by the Joint Committee on Taxation.
Constitutional context
This bill amends the Internal Revenue Code's tax credit provisions and, as a revenue-related measure, falls under Congress's taxing and spending power under Article I, Section 8; because it originated in the Senate but does not itself raise revenue (it modifies a tax credit allocation), Origination Clause concerns are minimal. No active constitutional dispute is implicated by this credit expansion.
Checks and balances
Congress sets the statutory credit formula and accessibility mandates; the IRS and Treasury issue implementing regulations; state housing finance agencies retain administrative discretion in allocating credits within the federal parameters, and courts could review agency implementation.
Historical precedent
The Low-Income Housing Tax Credit program itself was created by the Tax Reform Act of 1986 and has been periodically expanded, including increases to per-capita allocation amounts in prior legislation such as the 2018 omnibus spending bill.