On March 7, 2023, the Senate Finance Committee hosted a hearing titled “Tax Policy’s Role in Increasing Affordable Housing Supply for Working Families.” Witnesses included Denise Scott (President of the Local Initiatives Support Corporation), Steve Walker (Executive Director of the Washington State Housing Finance Commission), Sharon Wilson Geno (President of the National Multifamily Housing Council), Mark A. Calabria, PhD (Senior Advisor with the Cato Institute), and Garrett Watson (Senior Policy Analyst and Modeling Manager at the Tax Foundation Washington D.C.). Chairman Ron Wyden (D-OR) opened the hearing and stressed the urgency the committee feels in addressing this issue as it affects both welfare and the economy, and that he is in favor of a supply-side solution. Ranking Member Mike Crapo (R-ID) opened his remarks by mentioning the impact recent large fluctuations in inflation are having on the housing market.
Scott, Walker, and Geno all emphasized how broadly successful the Low-Income Housing Tax Credit has been and could be with the expansion proposed in Congress. Calabria and Watson acknowledged the impact of the credit but testify that other methods would likely be more successful in incentivizing construction. All witnesses spoke to the necessary implementation of multiple different solutions working together and creating a stronger, faster impact. Many committee members had questions surrounding proposed legislation, including the “Middle Class Mortgage Insurance Premium Act” and the “Neighborhood Homes Investment Act”. A few committee members also mentioned the lack of data available on the housing tax credit and how it could be helpful to utilize the GAO reports and suggestions on the topic to make the credit more successful.
By Maya Benysh, Policy Intern