CP - Affordable Housing - Michigan 7 2023 BFHGR

Affordable Housing
1NC
1NC- HUD fed
The United States Federal Government should
Substantially expand housing vouchers to cover more families;
Implement a housing developer-focused renters’ tax credit.
Federal Government has tools now to increase affordable housing – key to solving inequality
Green et al 2021 – (Kaye-Alese Green- Green received her bachelor’s degree in psychology and master’s degree in urban education and public health from the University of Central Florida and joined the racism in Medicine Vertical Integration Group (VIG), Allison Bovell-Ammon is the Director of Policy and Communications and leads federal policy work of Children’s HealthWatch as well as health care systems integration of housing and food. Megan Sandel, MD, is a professor of pediatrics at the Chobanian and Avedisian School of Medicine as well as a professor of environmental health at the Boston University School of Public Health.) 8/18/21, "Housing and Neighborhoods as Root Causes of Child Poverty," Academic Pediatrics, https://www.academicpedsjnl.net/article/S1876-2859(21)00437-X/fulltext//mish
The Civil Rights movement of the 1960s provided momentum for the creation and enforcement of equitable housing practices via the Fair Housing Act of 1968. This law prohibited discrimination on the basis of color, race, religion, and national origin in most real estate transactions, and established a moral and legal precedent for the banking and housing sector.12,15 Unfortunately, this pivotal law was often poorly enforced due to societal pressures to maintain the established racial hierarchy.12,15 The impact of racial residential segregation was compounded by systematic disinvestment in housing by the federal government in the late 20th century. The federal government has tools to address the needs of renters including the Low-Income Housing Tax Credit, which offers a tax incentive to developers to produce affordable housing, and the Housing Choice Voucher program, which provides rental subsidies to increase affordability for renters. These programs, however, are underfunded, in contrast to the mortgage interest deduction, which enables homeowners to deduct mortgage payments from their tax burden. As a result, deep inequities in wealth accumulation persist between predominately white homeowners and renters of color.16 This disinvestment intersected with a decreased low-income housing stock, and increasing cost for housing.10,16 These inequities were compounded by the Great Recession of the late-2000s that led to a rapid decline in homeownership and increase in renters, with the largest increase occurring in low-income households.16 The impact of the economic downturn and stagnant HUD funding restricted the sustainable pathways for low-income renters to secure affordable housing16 and led to an increased number of cost burdened renters (those who are paying greater than 30% of their income for rent) which rose from 14.8 million to 21.3 million from 2001 to 2014.16 It also led to an increased number of severely burdened households (those who are paying greater than 50% of their income for rent) which rose from 7.5 million to 11.4 million in the same time period.16 The economic downturn had a disparate burden on families and communities of color.16
Expanding Rental Assistance through subsidies is key to solve housing crisis without raising inflation
Bailey 22 (Peggy Bailey is the Vice President for Housing and Income Security. She oversees the Center’s work to protect and expand access to affordable housing, improve states’ Temporary Assistance for Needy Families (TANF) and child support programs and expand employment opportunities to housing and cash assistance recipients, Prior to rejoining the Center, Bailey served in the Biden/Harris Administration as the Senior Advisor on Rental Assistance to HUD Secretary Marcia L. Fudge. She also served as the Director of Health Systems Integration for the Corporation for Supportive Housing, 10/27/22, “Addressing the Affordable Housing Crisis Requires Expanding Rental Assistance and Adding Housing Units”, https://www.cbpp.org/research/housing/addressing-the-affordable-housing-crisis-requires-expanding-rental-assistance-and)//rrm
Rents have increased over the last two years at a historic rate. Between December 2017 and September 2022, the median rent for newly leased units rose nearly 32 percent, with nearly all of that increase occurring in 2021 and 2022.[1] (See Figure 1.) These higher rents are especially hard for families with the lowest incomes to absorb. Closing the housing affordability gap will require a comprehensive housing strategy, including developing new units, preserving existing affordable housing, and expanding rental assistance. Expanding the Housing Choice Voucher program, as the 2023 House-passed Transportation-Housing and Urban Development (HUD) funding bill calls for, would most immediately help renters absorb cost increases. Such an expansion would help reach renters with the lowest incomes. Over the long term, lawmakers should enact major additional rental assistance expansions, with the goal of making assistance available to everyone who is eligible. Rental assistance provided directly to tenants gives people more choice of where to live and the opportunity to reduce segregation of people with low incomes, can also be project-based to support new affordable housing units. Policymakers at the federal, state, and local levels can further address the crisis in housing affordability by making additional capital investments in housing and taking related actions, including: Reducing the shortage of deeply affordable rental housing, implementing a housing developer-focused renters’ tax credit, and reversing restrictive local zoning practices; Preventing the loss of existing affordable housing; Improving the Low-Income Housing Tax Credit program; Investing in tribal communities’ housing needs; Removing barriers to homeownership; and Reforming project-based housing programs to encourage higher-quality housing. While rising rent costs are currently headline news, the housing affordability crisis has existed for years, primarily due to the gap between families’ incomes and their rent costs.[2] (See Figure 2.) This, coupled with the fact that federal rental assistance only reaches about 1 in 4 likely eligible households, means that millions of families have long struggled to afford housing and meet other basic needs such as food, clothing, and transportation. In 2019, about 9.4 million households without rental assistance paid more than 50 percent of their income on rent or lived in severely inadequate housing. Of these renters, 7.8 million were very low income, defined by HUD as at or below the federal poverty line or 50 percent of area median income, whichever is higher.[3] These counts don’t include the almost 600,000 people who experience homelessness on any given night,[4] or the millions of people who are living doubled up[5] or are unnecessarily institutionalized due in part to an inability to afford a place to live on their own.[6]The federal government began investing in public housing developments to make housing affordable to people with low and moderate incomes. Initially, in the aftermath of World War II, primarily white people lived in public housing due to housing segregation and a federal focus on the housing needs of returning white war veterans. Public housing developments helped residents quickly stabilize their housing and move on to unassisted housing and homeownership.[7] But over time — and not coincidently — as people of color increasingly moved into public housing units, the government failed to provide enough funding to make up the growing gap between what people could pay in rent and what it cost to maintain developments in good condition, which caused public housing properties to deteriorate and surrounding communities to suffer.[8] It’s estimated that over $70 billion is currently needed to revitalize public housing; that amount doesn’t include addressing the lack of adequate ongoing maintenance costs.[9] As a result, families with the lowest incomes have limited access to public housing, nor can they find housing that is affordable given their incomes in the private rental market. Even if landlords charged only what they’d need to cover their costs of ongoing operations, general maintenance, and debt payments owed on the development, the rents would exceed many people’s ability to afford their rent. For example, in 2019, the average income for a household designated as “extremely low income,” defined as 30 percent of area market income or below, was $11,318 per year. That same year, the average monthly operating cost for a rental unit — the cost for a landlord or property owner to break even, not including any profit — was about $520 per month, or a little more including utilities. HUD generally considers a unit affordable if rent and utilities do not exceed 30 percent of income. In this scenario, 30 percent of $11,318 is $283 per month, about half of the landlord’s minimum costs — and most housing costs more than this minimum calculation. The gap between the cost of housing and what households can afford must be closed either by households using more of their income on rent — further straining their ability to pay for their basic needs — or with housing subsidies. To address these challenges, the federal government has turned to tenant-based rental assistance, typically in the form of federal Housing Choice Vouchers, which subsidize housing costs in private rental housing. Compared to public housing, tenant-based rental assistance: Gives people more choice of where to live; Provides the opportunity to reduce segregation of people with low incomes, who are disproportionately people of color, in neighborhoods that have historically been and continue to be disinvested in; Can be used where people live now so a new unit isn’t necessarily needed and the family feels immediate relief; and Can be project-based, up to a certain amount, to support new affordable housing units and to restructure long-term financing for redeveloped public housing properties, which helps stabilize funding for ongoing operating costs.[10] Vouchers can also support new rental housing development. This is done when housing agencies tie vouchers to a specific unit (known as “project-based vouchers”) to guarantee that developments include units affordable for families with low and extremely low incomes.[11] The value of these vouchers is promised in advance and included as part of the financing structure for the development. This structure ensures that at least some of the operating costs will be covered, which also lowers the risk to lenders. For example, many buildings with units dedicated as permanent supportive housing for people experiencing homelessness who also have disabilities use project-based vouchers to make units affordable for this population. One of the benefits for tenants of project-based vouchers over other federal project-based assistance programs (like public housing) is that if the tenant wants to move after the first year, they are guaranteed the next available tenant-based voucher, which allows them to live wherever will accept the voucher. The housing property with the project-based voucher keeps that subsidy for the next tenant. The House-passed Transportation-Housing and Urban Development bill’s funding level of $1.1 billion would be enough to help about 100,000 to 140,000 additional families afford safe, stable homes. Most immediately, in 2023 appropriations legislation, Congress should provide as much of that $1.1 billion for new vouchers as possible, in addition to providing enough funds to cover the cost of existing vouchers. Some argue that increases to the voucher program would push up rents by increasing demand for rental units and contribute to inflation; however, research on previous voucher expansions has found that vouchers have little overall impact on housing demand or market rents.[12] Hence, they should have little direct effect on inflation. It is also important to understand that many new voucher holders are current renters who, if their current unit meets inspection standards and their landlord will accept a housing voucher, can use assistance to help pay their current housing costs. Also, the voucher program’s payment rules include elements that constrain housing costs. The program’s payment standards cap subsidies based on moderate rents in local markets, and housing agencies must certify that rents are reasonable compared to rents charged for similar, unassisted units in the community. Without rental subsidies, families are at risk of the negative outcomes caused by housing instability such as eviction, homelessness, and frequent moves.[13] The overwhelming research on the voucher program shows that the gains for families far outweigh concerns about impact on the housing market. Over the long term, lawmakers should enact major additional rental assistance expansions, with the goal of making help available to everyone who is eligible. Currently, only 1 in 4 households who are likely eligible for federal rental assistance receive it. This has real-world negative consequences on people and communities, with research showing the negative impacts on health, childhood well-being, employment, and housing stability that result from families struggling to afford their rent.[14] President Biden’s 2023 budget and the House-passed version of the Build Back Better Act included significant voucher expansions to move toward this goal.[15]
1NC- Private sector (Federal)
The United States federal government should substantially increase the Low-Income Housing Tax Credit program.
Private developers say yes, the cp dramatically increases the availability of affordable housing
Ventura 22 (Judith Ventura has spent twenty-five years as a public accountant specializing in non-profit, real estate and construction industries. She oversees all aspects of auditing and accounting, attestation, and other business consulting services for a mix of closely held and privately-owned clients. She also has a Bachelor of Science in Business Administration - Management and Accounting Concentration - Bryant University, 4/25/22, “Developers, Have You Considered the LIHTC Program to Fund Construction?”, https://kahnlitwin.com/blogs/tax-blog/developers-have-you-considered-the-lihtc-program-to-fund-construction)//rrm
The Low-Income Housing Tax Credit (LIHTC) program is the federal government’s primary tool for encouraging the development and rehabilitation of affordable rental housing. The program gives State and local LIHTC allocating agencies the authority to issue LIHTCs to developers to offset the costs of acquisition, rehabilitation, or new construction of rental housing targeted to lower-income households. These units are subject to rent restrictions such that the maximum permissible gross rent, including an allowance for utilities, must be less than 30% of imputed income based on an area’s median income (AMI). Typically, developers sell their LIHTCs to outside investors in exchange for equity financing to cash flow the project. The LIHTCs give investors a dollar-for-dollar reduction in their federal tax liability in exchange for providing financing to develop affordable rental housing. Investors' equity contribution subsidizes low-income housing development, thus allowing some units to rent at below-market rates. To qualify for the credit, a project must meet the requirements of a qualified low-income project. Generally, project sponsors/developers (project sponsors) are required to set aside at least 40 percent of the units for renters earning no more than 60 percent of the AMI (the 40/60 test) or 20 percent of the units for renters earning 50 percent or less of the AMI (the 20/50 test), as elected by the property owner. In addition, LIHTC owners cannot discriminate against voucher families and must accept Section 8 voucher tenants. The process of allocating, awarding, and the claiming the LIHTC begins at the federal level with each state receiving an annual LIHTC allocation according to its population, with a minimum small population state allocation ($3,245,625 in 2021). The credit allocation for 2021 and 2022 was increased for buildings located in any qualified disaster zone. A state’s Qualified Allocation Plan sets the state’s initiatives of its affordable housing program, shaping the type and location of housing built. There are two types of credits available to developers: the 4 percent credit and 9 percent credit and calculated as 4 percent or 9 percent of the project's qualified basis, a figure calculated from the gross construction costs of the project's affordable units (excluding land). The 4% tax credit (30% subsidy) is for the acquisition of existing buildings for rehabilitation and new construction financed by tax-exempt bonds. The 9% tax credit (70% subsidy) is usually for new construction and substantial rehabilitation without federal subsidies. Once the housing project is placed in service and the required occupancy rate has been achieved (essentially, made available to tenants), investors can claim the LIHTCs in equal amounts over a 10-year period. Building owners must make a one-time submission of Form 8609 to the Low-Income Housing Credit Unit of the IRS no later than the due date of their first tax return. A separate Form 8609 must be issued for each building in a multiple building project and can be used to obtain a housing credit allocation from the housing credit agency and certify certain information. Generally, a state income tax credit is treated for federal income tax purposes as a reduction or potential reduction in the original recipient's state tax liability to the extent that the taxpayer can only apply the credit against a current or future tax liability. State tax credits are generally recognized over a 5-year period. LIHTC properties must commit to at least 30 years of affordability, and subject to a 15-year “compliance period,” monitored by state housing agencies. This is the period where the tax credits that have been given to developers can be taken away or “re-captured” if the property fails to comply with LIHTC regulations.
1NC- Private Sector (States)
The 50 states and all relevant territories should streamline access to affordable housing financing.
State action solves affordable housing
Young 22 (Arica Young serves as ASSOCIATE DIRECTOR for the Underserved Mortgage Market Coalition (UMMC) and the Innovations in Manufactured Housing Network at the LINCOLN INSTITUTE OF LAND POLICY, where she works to facilitate coalitions focused expanding homeownership opportunities for households, 7/30/22, “Five Actions States Can Take to Improve Housing Affordability”, https://bipartisanpolicy.org/blog/housing-affordability-five-actions/ //mish
With a national shortage of homes for sale and rent, affordable housing is increasingly out of reach for a growing number of Americans. As the primary regulators of land-use and zoning policies, local governments are perhaps best positioned to reform policies that limit the supply of housing. However, state governments can also play a significant role in increasing housing production and preservation and improving housing affordability. Below are five meaningful actions that states can take. 1. Coordinate affordable housing financing across multiple funding sources. Financing for affordable housing production relies on a complicated matrix of funding sources, often called the “capital stack.” These sources can include tax credits, housing bonds, private equity, and grants. Accessing these financing options often requires separate and complex applications and administrative processes. By serving as a clearinghouse for these various funding options, a state can help expedite the application process and enhance the abi

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