Middle-Income Housing Tax Credit legislation introduced


Senate Finance Committee Chair Ron Wyden, D-Ore., along with Sen. Dan Sullivan, R-Alaska, and two bipartisan members of the House Ways and Means Committee have introduced companion bills in both the House and Senate to create a tax credit aimed at  development of middle-income rental housing.


Wyden is actively pushing the legislation, even pitching a bipartisan housing bill as part of extenders negotiations, though its inclusion appears unlikely.


Modeled after the Low-Income Housing Tax Credit, the Workforce Housing Tax Credit would cover 50% of the cost of a new construction during the lifetime of the building, or 20% for rehabilitated and bond-financed buildings. Buildings whose units are occupied by individuals with income at 100% or less of the median income for the area in which they reside and rents are maintained at 30% of a designated income. Affordability restrictions would be kept in place for an up-to-30-year period, with a 15-year affordability period required after the initial compliance period as part of an extended commitment.


The credit would be allocated according to state population at an initial $1 per capita rate with a minimum $1.5 million allocation and can be made more generous for projects in areas deemed by the Department of Housing and Urban Development to be “difficult development areas.” However, state agencies would only be able to direct the credit to projects otherwise not seen as viable without the assistance, and the middle-income housing credit could be shifted to Low Income Housing Tax Credits at the state’s discretion or combined with LIHTCs on the same project. 



Tax professional standards statement

This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “§,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.


More tax hot topics