Opinion: How Congress can help solve California’s housing crisis
Californians are increasingly faced with housing insecurity as 47 percent of our state’s voters say they cannot find an affordable place to live, according to a recent Quinnipiac poll. Clearly, the lack of an affordable housing supply is one of the root causes of high housing costs in California. Congress can alleviate this crisis by providing more federal tax credits for more affordable housing.
California is acutely affected by high housing costs. For every 100 very low-income households making 50 percent of area median income or less, only 31 homes are affordable and available. Nearly a third of renters in my congressional district on the Central Coast, approximately 31,000 households, spend more than half of their income on housing and utilities. Teachers, farmworkers, childcare workers, and emergency responders working a 40-hour week are unable to afford a one-bedroom apartment in Salinas. Those supporting our communities struggle to afford living in them.
Local, state, and federal leaders are working to address this issue and ensure Californians have a safe and affordable place to call home. In Congress, I secured funding for affordable housing programs and support tax deductions for renters and affordable housing near public transit. However, more must be done to address the high cost of housing which comes from the lack of affordable housing.
Fortunately, there are steps we can take to increase the supply of affordable housing. As a Member of the U.S. House Committee on Ways and Means, which has jurisdiction over our tax code, I recognize how tax credits can help solve the affordable housing crisis.
The Affordable Housing Tax Credit (AHTC), also known as the Low-Income Housing Tax Credit, is one such policy. The AHTC provides tax credits to state housing agencies, who distribute them to developers working with qualified investors to lower the cost of financing. Lower financing costs allow for lower rents and limit how much a tenant can be charged based on income.
The AHTC has successfully driven investment in both building and rehabilitating low- and moderate-income housing. Since 1986, the AHTC has financed more than 3 million units, including 8,000 homes built or preserved in my congressional district. On the Central Coast, the AHTC has been used to build 44 new affordable farmworker housing units near Soledad. It helped finance the construction of 200 units in Salinas, 104 new units for low-income families in Marina, and nearly 50 affordable homes for families in Santa Cruz. These units provide a lifeline for our neighbors and community. AHTC is one of our state’s most valuable resources for creating and sustaining affordable housing.
I’m a strong supporter of the bipartisan Affordable Housing Credit Improvement Act, HR 3077, to expand and strengthen AHTC to incentivize building more affordable housing and better support underserved communities. Supported by over 150 congressmembers, the legislation would increase the number of allocated tax credits by 50 percent and increase the number of units built by over 500,000 units over the next decade.
In addition to increasing the number of credits available, the bill creates more veteran-specific housing options, further serves extremely-low income communities, and ensures Violence Against Women Act standards are applied to properties built using the AHTC.
For our agricultural communities, the Affordable Housing Credit Improvement Act includes provisions for more credits to go into rural properties, and it standardizes rural income limits for Housing Credit and Housing Bond properties.
Affordable housing is a challenge, but it can be overcome. Innovative federal, state, and local solutions must be pursued. Congress can play its part of the comprehensive solution to our housing crisis by passing commonsense, bipartisan policies like the AHTC.
Jimmy Panetta represents District 20 in the U.S. House of Representatives. The distirct includes Monterey and San Benito counties, as well as portions of Santa Cruz and Santa Clara counties.