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NCSHA Washington Report | April 12, 2024

Published on April 12, 2024

NCSHA Washington Report
If you’re at all stressed about next week’s tax filing deadline, just wait til next year around now, when not only will everyone’s 2024 returns be due but our federal political system will be tasked with whether and how to extend the 2017 tax cuts that will expire mere months from then — a legislative exercise with multi-trillion dollar-stakes for the U.S. economy.

Expect to start hearing in the runup, from some on both the left and the right, about how Congress’ 2025 tax reform effort shouldn’t wade too much into “social policy” through new and expanded “tax expenditures.” Those are the dozens of exclusions, exemptions, deductions, and credits throughout the tax code that reduce what companies and citizens would otherwise owe Uncle Sam.

Tax expenditures have been around for decades. They currently cost the federal government $1.8 trillion in forgone tax revenue — with the largest five accounting for more than half that amount — and have represented between six and eight percent of GDP for the past decade.

Some say tax expenditures are spending programs by another name that pale by comparison since they don’t run through the annual appropriations process where programs are “more likely to be scrutinized.” Not really. In the last 25 years, Congress has passed no fewer than 131 temporary funding bills (“continuing resolutions”) necessitated by breakdowns in the budget process, a practice the nonpartisan Peter G. Peterson Foundation says “prevents the consideration of programs to determine if they merit continuation.”

Some argue that direct spending may be more efficient and less expensive than tax expenditures. Not necessarily. Eric Toder of the Urban-Brookings Tax Policy Center, an expert on but no cheerleader for expenditures, acknowledges that “what matters is the total cost of government programs — not whether the costs are borne by the IRS and taxpayers instead of by a spending agency and its potential beneficiaries.”

Another critique of tax expenditures is that their advocates portray them as “tax cuts” in order to garner broader political support. In a period of extraordinary polarization and volatility, this strikes us as more of an asset than a liability. It may even be the case, as two political scientists argue in a recent book, that not only are social tax expenditures generally popular, “the programs are supported by subpopulations that normally are not inclined to support public social spending.”

We’re not here to defend every federal tax expenditure. Judge each one — and every spending program for that matter — by a simple test: Does it meet a legitimate public need efficiently, effectively, and at a manageable federal cost in light of its benefits? Housing Credits and Housing Bonds meet that test. Proposals modeled on them to support new home buying and home construction could do the same.

We aren’t waiting until 2025 to make those arguments.

Stockton-Williams-Washington-Report

Stockton Williams | Executive Director

In This Issue

Virgin Islands HFA Appoints Eugene Jones Jr. Executive Director
Eugene Jones Jr. has been appointed executive director of the Virgin Islands Housing Finance Authority. Jones most recently served as executive director of the Atlanta Housing Authority and brings to his new role decades of experience working in housing agencies in cities such as Chicago, Toronto, New Orleans, and Detroit.

House Republicans Select Cole as Appropriations Committee Chair
On Tuesday, the House Republican Caucus selected Rep. Tom Cole (R-OK) to take over as chair of the full House Appropriations Committee, replacing Rep. Kay Granger (R-TX). Granger, who previously had announced her retirement at the end of her term, decided to give up her gavel early to help facilitate the transition. Cole previously served as chair of the House Transportation, Housing, and Urban Development Appropriations Subcommittee, which has jurisdiction over funding for the programs of the U.S. Department of Housing and Urban Development.

IRS Provides Supplemental 2023 National Pool Housing Credits to 28 States
On April 8, the Internal Revenue Service published Revenue Procedure 2024-18 providing supplemental 2023 national pool Housing Credit authority to the 28 states that received 2023 national pool Credit authority last October. Because states did not have the ability to allocate this supplemental authority in 2023, IRS effectively is treating the additional national pool authority as unused Housing Credit ceiling carried forward for allocation in 2024. The ruling clarifies that this additional authority will not impact national pool qualification for calendar year 2024. If an agency already has submitted a request to participate in the 2024 national pool, it does not need to resubmit the request. Contact NCSHA’s Jim Tassos with questions.

HUD Proposed Rule Would Mitigate Housing Barriers for Applicants with Convictions, Arrest Records
On Wednesday, HUD published a proposed rule that would amend the regulations governing admission to certain HUD-supported housing for applicants with criminal records or histories of involvement with the criminal justice system and evictions on the basis of illegal drug use, drug-related criminal activity, or other criminal activity. The proposed rule would require public housing authorities to consider the recency and relevance of previous criminal activity before denying or terminating covered housing assistance. HUD is accepting comments on the proposed rule until June 10.

$10 Million Available for Choice Neighborhoods Planning Grants
On Tuesday, HUD published a notice of funding opportunity to provide $10 million through the Choice Neighborhoods Planning Grant program to eligible nonprofits, local governments, Native American tribal governments, and public housing authorities. The grants will support local planning efforts to revitalize selected communities, focusing resources on three areas: housing, people, and neighborhoods. Winning applications will demonstrate the revitalization of distressed public or assisted housing units while also transforming the surrounding neighborhood by adding community amenities such as grocery stores and parks. HUD anticipates awarding grants to 20 communities. Applications are due by June 10.

HUD Provides $70 Million to Make Homes Healthy and Safe
On Tuesday, HUD announced the award of $70 million in grants to address housing-related health and safety hazards, including hazards related to lead-based paint and research examining housing-related health hazards. You can find a list of the awards, made through the Office of Lead Hazard Control and Healthy Homes, here.

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