Washington, DC – Today, DC Councilmember Kenyan R. McDuffie (D-Ward 5), along with Chairman Phil Mendelson (D-Chair), and Councilmembers Jack Evans (D-Ward 2) and David Catania (I-At-Large) introduced legislation creating a tax credit to subsidize the production of affordable rental housing. Under the program established in the bill, District of Columbia Low Income Housing Tax Credits (DC-LIHTC) could be awarded to developers as an indirect subsidy toward the production of affordable housing.
The DC-LIHTC program is modeled after and designed to supplement the federal low-income housing tax credit. The tax credits would be awarded to developers who could then sell the credits to investors to raise equity for low-income housing development projects. This method of affordable housing finance subsidizes buildings at a significant level, allowing units to be leased at deeply affordable rents. “The intent behind the bill is to give the private market an incentive to invest in affordable rental housing,” stated McDuffie.
In 2012 the District’s Comprehensive Housing Strategy Task Force recommended in its final report that the District study the feasibility of creating a local tax credit to supplement the federal LIHTC program. McDuffie’s legislation advances this recommendation and, if passed, would place the District on par with fourteen other states that have created local tax credits to supplement the federal subsidy.
Since the year 2000, half of the low-cost rental housing units in the city have been lost and increases in rents have greatly out-paced earnings, particularly for those at the lower end of the economic ladder. McDuffie noted, “Investing in affordable housing is an essential component of maintaining economic diversity in this city. While we have made admirable strides in recent years to allocate District funds toward the production and preservation of affordable housing, more can and should be done.”
The bill was referred to the Council’s Committee on Finance and Revenue and was co-sponsored by Councilmembers Alexander, Bonds, Bowser, Cheh, Graham, Grosso, Orange, and Wells
