Office of Senator Maria Cantwell announcement.
TACOMA, WA – Today (August 3, 2024), U.S. Senator Maria Cantwell joined local leaders in Tacoma to celebrate the grand opening of Tacoma Housing Authority’s Housing Hilltop, a 231-unit affordable apartment complex. Housing Hilltop utilized the federal Low-Income Housing Tax Credit (LIHTC) program, offsetting the cost of construction by $50,778,000.
“I’m trying to do something in Washington D.C. — and that’s get a hell of a lot more money for affordable housing […], that is to try to add 200,000 more units nationwide over the next two years. We’re going to keep fighting until we get it done,” Sen. Cantwell said.
“Affordability is what we’re after here. Affordability. A recent study showed that for every 10% increase in housing supply, local rents go down across the board by 1%. So I keep saying to people, this is about supply. If you don’t add supply, everyone’s rent is going up.”
Housing Hilltop is Tacoma Housing Authority’s largest affordable housing project since New Salishan and will include:
- 231 affordable housing units;
- 13,000-square feet of commercial retail space, including a 10,000 square-foot performing arts and community gathering space;
- Housing policies that will allow households that have been displaced from the Hilltop to return to the neighborhood.
Tacoma Housing Authority is working with Tacoma Urban Performing Arts Center to lease the performing arts space and will prioritize BIPOC businesses to rent the other spaces. In these spaces, community members will watch performances, shop, eat, and interact with business owners and neighbors — contributing to the fabric of the community.
LIHTC is a federal program that supports the construction or renovation of affordable rental housing. The program partners federal resources with private investment to create housing that would otherwise be unprofitable and remain unbuilt. Since 1986, the Low-Income Housing Tax Credit has paid for 90% of the federally-funded affordable housing construction across the country, and has financed over 3.8 million affordable homes, including more than 100,000 in Washington state. The economic activity that the credit generated has supported nearly 170,000 jobs and generated more than $19 billion in wages.
On Thursday, the Senate voted on a broader tax package that included Sen. Cantwell’s proposed LIHTC expansion. The package — which would have required 60 votes to pass — failed, with 48 ayes and 44 nos. (Majority Leader Chuck Schumer voted for the package, but changed his vote to no for procedural reasons.)
The Tax Relief for American Families and Workers Act contained two provisions authored by Sen. Cantwell to improve LIHTC. These improvements would have:
- Lowered the requirement for bond funding from 50% of a project to 30% of a project for developers to receive the tax credit, marking the first reduction in the bond test in 35 years. According to the Washington State Housing Finance Commission, this will allow the state to issue millions more worth of bonds and build nearly twice as many units as expected — an additional 1,500 units of housing financed in 2024.
- Restored a 12.5% tax incentive increase that originally expired in 2021. According to the Washington State Housing Finance Commission, this improvement will allow Washington state to fund 222 more affordable apartment units in 2024, and 600-650 units over three years. The increase will help the state allocate more funding for housing for the lowest income and most vulnerable people in Washington state, especially the homeless.
Ahead of the vote, Sen. Cantwell spoke on the Senate floor on Wednesday to advocate for the expansion of the LIHTC program. Among other benefits of LIHTC, Sen. Cantwell highlighted new data from Moody’s Analytics which found that LIHTC housing projects saved renters in the Seattle area $898 per month compared to the average rents in the region. Video of those remarks is available HERE; audio is HERE; a transcript is HERE.
In February, Sen. Cantwell joined Seattle Mayor Bruce Harrell and other local leaders, housing advocates, and tenants to celebrate the grand opening of John Fox Place, a 104-unit affordable housing complex in Seattle’s Greenwood neighborhood.
Also in February, Sen. Cantwell delivered remarks at Mother Teresa Haven, an affordable housing project in Spokane, calling on the Senate to pass the bipartisan tax package. The 48-unit affordable housing complex used the LIHTC program to cover 70% of the overall project cost. Following the press conference, Sen. Cantwell joined a tour of the apartments available at Mother Teresa Haven; video of that tour can be viewed HERE, and photos are available HERE. A transcript of her remarks is HERE.
In March, Sen. Cantwell joined a grand opening celebration for Laurel Forest Apartments, a 56-unit affordable housing project in downtown Bellingham. The nonprofit which built Laurel Forest used the LIHTC program to offset 58% of the cost of construction.
More details about of Sen. Cantwell’s leadership on LIHTC is HERE.
About LIHTC: A National Need
There is an affordable housing crisis in this country. The U.S. has a shortage of 3.89 million affordable rental homes. The scarcity of supply has only been exacerbated by the 2008 Great Recession and the COVID-19 pandemic.
The State of Washington only has 28 affordable and available rental units per 100 extremely low-income renter households. Other states with low supplies of affordable and available housing include Nevada (with only 17 available for every 100 extremely low-income renters); Oregon and Florida with 23 units per 100; and California and Arizona with 24 units per 100.
The absence of affordable housing has also led to skyrocketing rental rates. Rent payments have reached an all-time high, and half of all renters spend 30% or more of their total income on rent, while one-quarter spend more than 50% of their income on rent. This leaves many households one paycheck away from possible eviction and burdened by their housing costs.
Disproportionate Impacts
The housing crisis has hit the country’s most vulnerable populations the hardest. BIPOC households are disproportionately affected by the affordable housing shortage because they are more likely to be renters, spend a significant portion of their income on housing, and may face economic inequalities created by previous discriminatory policies.
The LIHTC program is essential for lifting up traditionally underserved rural and minority families because often it’s the only way these communities can build affordable housing. In some of the most underserved rural counties, LIHTC supports just over 40% of all multifamily housing built, three times the national average.
An Economic “Shot in the Arm”
Affordable housing is critical to continued economic development for the U.S. and the financial success of individual renters. Although inflation is down substantially, high housing costs are directly tied to increasing inflation. In June 2024, housing costs continued to rise, and were the biggest driver keeping inflation elevated, accounting for over two-thirds of the monthly all items increase. Increasing the affordable housing supply will decrease rents for households nationwide and lower inflation.
Studies have shown that expanding housing supply lowers rents. For example, a 2019 study by the D.C. Office of Revenue Analysis found that renters saved $177 per month, or $2,124 per year, after an average of 2,337 new units of housing were built per year in Washington, D.C. Conversely, the study found that had the new units not been built, average city apartment rents may have increased by 5.84%. A New York University study found that, for every 10% increase in housing supply, nearby rents decreased by 1%.
Moreover, research has shown the affordable housing shortage costs the U.S. economy nearly $2 trillion annually in lower wages and productivity. LIHTC can help by providing renters with a safe, stable, and affordable place to call home, which helps them perform better at school, hold a job, and be mentally and physically healthier. For example, their total Medicaid expenditures decrease by 12% and they made 18% fewer emergency department visits.
The LIHTC program also creates construction jobs. LIHTC-funded housing development annually supports approximately 95,000 jobs and $7.1 billion in wages and business income. Additionally, the program contributes $2.8 billion in federal, state, and local taxes, which helps local development.
