Measure Would Help Finance More Affordable Housing Units In NYC, Extend More Tax Credits For First-Time Homebuyers & Provide Other Measures To Strengthen Housing Market & Stem Tide Of Foreclosures

Congressman Charles Rangel joined local and national leaders in hailing Tuesday's signing of The American Housing Rescue and Foreclosure Prevention Act into law, saying that it will go along way in addressing the shortage of affordable housing options in cities and towns in New York and across the United States.

This is the right thing to do for our country during this economic downturn,” said Rangel. "This law expands and improves the low-income housing tax credit, which is the largest source of federal support for the construction and rehabilitation of affordable housing. It also increases volume limits on housing bonds to finance low-income rental housing and first-time homebuyers, while also providing states with greater flexibility on how to use those bonds efficiently."

Rangel, Chairman of the House Ways and Means Committee and a longtime advocate for improved access to low-income housing, has helped lead the charge in Congress to respond to the current housing crisis.

“House Ways and Means Committee Chairman Charles Rangel has once again demonstrated his deep commitment to providing affordable housing help to those who need it most," said Barbara J. Thompson, executive director, National Council of State Housing Finance Agencies. "Because of the Chairman’s leadership, the housing stimulus legislation signed into law significantly expands and strengthens two of the most effective federal housing programs—the Low Income Housing Tax Credit and tax-exempt Housing Bonds—and the ability of State Housing Finance Agencies to put these resources to work on some of the toughest affordable housing challenges our country has ever faced.”

Denise Scott, Managing Director of the New York City branch of national community development organization Local Initiatives Support Organization, said that the organization looked forward to working with government and local partners to implement the solutions and programs contained in this bill.

"This is a tremendously significant piece of legislation," said Scott. "Not only will it bring help to homeowners at risk of foreclosure, and to communities hard-hit by the crisis, it will also expand the tools and resources available to develop affordable rental housing, by making tax credit investment more attractive and expanding tax-exempt mortgage bonding authority.  It also creates, in the Housing Trust Fund, the first new federal housing production program in a generation. "

STATE & CITY BENEFITS

Locally, the bill promises to create thousands of affordable housing units in New York state. It provides a ten percent increase in the credits allocated among states, and an $11 billion increase in tax-exempt bond authority to support single family and rental housing. Also included in the package is a provision to enable cities and towns to more efficiently use tax-exempt bonds in the effort to develop affordable rental housing, a move that will enable New York City to issue significantly more bonds so that it can support the development of thousands more rental units for low-and moderate-income families.

As a result, as many 10,000 affordable housing units are estimated to be built across the state, with at least half located within New York City. Housing advocates agree these changes will result in additional units of housing and, especially, more units for lower-income families.

"The National Housing Trust Fund provisions of this bill will provide tenants and their allies with a vital new resource to preserve rapidly depleting affordable housing to ensure that New York's neighborhoods are stable, diverse communities with affordable housing for all - not only for the wealthy," said Patrick Coleman of the city advocacy group Tenants & Neighbors. "Recognizing that construction of new housing alone cannot solve the housing crisis, Congress took the right step to allocate funds to preserve existing affordable housing."

Priscilla Almodovar, President and Chief Executive Officer of the New York State Housing Finance Agency, agreed.

“I congratulate Congressman Rangel and the rest of the New York delegation for championing the housing needs of working families in our state," said Almodovar. "With this Act, New York gets the additional tools it needs to address the backlog of affordable rental units that needs financing and the increased demand for low interest-rate mortgages from first-time homebuyers. The Act is also crucial to our efforts to stabilize endangered neighborhoods across New York by providing millions of dollars to buy and renovate foreclosed homes."

"Passage of the Affordable Housing Trust Fund represents a re-invigorated commitment by Congress to affordable housing- both in terms of preservation and new construction," said Urban Homesteading Assistance Board (UHAB) Organizing and Policy Director Dina Levy. "It is critical that this commitment be paired with companion policy initiatives that ensure the Fund will be used in a way that serves families most in need of decent, safe and affordable housing."

The Affordable Housing Tax Credit Coalition (AHTCC), a trade group representing many of the public and private sector participants in the affordable housing tax credit industry, also praised Rangel's leadership in getting what they termed as critically important improvements to the federal Low-Income Housing Tax Credit (LIHTC). Over 2 million rental units across the nation have been developed through the LIHTC since the Rangel-sponsored measure was passed in1986.

"The housing tax credit is the single most important federal program supporting the development and preservation of affordable rental housing, the need for which continues to grow," said AHTCC Counsel Richard Goldstein. "Mr. Rangel has long been the champion of this very successful public-private partnership program and he understands how important this housing is for the people of his district, state and for the Nation as a whole.  We commend him for his efforts, understanding and vision in helping to make affordable rental housing a reality for millions of low-income people."

LAW STRENGTHENS BOTH RENTAL HOUSING & HOME OWNERSHIP

House Speaker Nancy Pelosi thanked Rangel and other Congressional members for assembling the bipartisan coalition that created a comprehensive package of measures aimed at stemming the tide of foreclosures, stabilizing local housing markets, providing incentives for first-time homebuyer and increasing access to affordable housing for low-income communities.

“This bill would not have happened without the outstanding leadership of the principal House authors, Chairman Barney Frank and Chairman Charles Rangel, as well as the strong efforts of Congresswoman Maxine Waters, who ensured that communities across America will receive funds to restore neighborhoods and prevent further declines in home values," said House Speaker Nancy Pelosi. "I also want to thank Treasury Secretary Henry Paulson, who worked closely with Democrats in Congress to pass this legislation and ensured that the President would sign it into law.

“Homeownership is an essential part of the American Dream," continued Pelosi. "By expanding homeownership opportunities and protecting families against foreclosure, we are helping keep the American Dream alive. By restoring confidence in the housing market, our economy can begin to grow and create jobs for the American people again.”

Overall, The American Housing Rescue and Foreclosure Prevention Act will allow hard-working American families in danger of losing their home to refinance into lower-cost government -insured mortgages they can afford to repay – at no cost to the American taxpayer. The legislation also:

Rangel solicited the advice of a variety of local city housing leaders in crafting the tax provisions of the bill, including NYC Housing Preservation and Development Commissioner Sean Donovan and NYS Division of Housing and Community Renewal Commissioner Deborah Van Amerongen.

Those provisions include:

• First-time homebuyer tax credit to assist in making a down payment on a home - This would provide individuals and families with a refundable credit (equivalent to an interest-free loan) of ten percent of the purchase price of their home (up to $7,500). Taxpayers would be required to repay any amount received under this provision to the government over 15 years in equal installments. The credit is phased out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 in the case of a joint return).
  

• Additional standard deduction for real property taxes to help homeowners who claim the standard deduction by allowing them to claim an additional standard deduction of up to $500 ($1,000 for joint filers) for State and local real property taxes. This provision applies for tax year 2008. 
   

• Temporary increase in low-income housing tax credit and simplification of the credit -  The bill would increase the current limit of the credit from $2.00 for each person residing in a state by an additional ten percent. This will help put builders to work to create new options for families seeking affordable housing alternatives. The credit will also be simplified to improve its effectiveness. 
  

• Temporary increase in mortgage revenue bonds -  The bill would also allow for the issuance of an additional $11 billion of tax-exempt bonds to refinance sub-prime loans, provide loans to first-time homebuyers and to finance the construction of low-income rental housing.

“Of the problems that were created by the reckless deregulation that led to the subprime crisis and the neglect of affordable housing that has marked Republican rule in Congress, this package of measures is the best response we could make.  It cannot solve all of these deep rooted problems immediately but the bill does represent a mutually reinforcing set of approaches that will begin to diminish the problem,” said House Financial Services Committee Chairman Barney Frank (D-MA).  “This will begin to lay the groundwork for a turnaround in the housing market and hopefully in the broader economy as well.”