Proposed bill would lift federal financing limits for affordable housing in high-demand states
New York’s affordable housing crisis could get some relief under a new proposal aiming to remove federal barriers on financing for low-income housing projects.
The ASAP Housing Act, introduced by Congressmember Ritchie Torres, would exempt affordable housing units serving households at or below 80% of area median income (AMI) from federal volume caps on tax-exempt private activity bonds.
This exemption, set to last 10 years, would allow for a faster pipeline of affordable housing developments at a time when demand far outweighs supply.
“The best time to create the housing that we need on the scale that we need is as soon as possible,” Torres said, speaking at a Bronx affordable housing site in his district. He said that existing policies effectively restrict affordable housing at a time when soaring rents and limited supply are pushing low-income households to the brink.
“A housing cap in the midst of a housing shortage is an open invitation to housing inflation. Instead of capping the volume of affordable housing, we should be capping the cost of housing. And the best way to cap the cost of housing is to uncap the volume of housing,” Torres said, adding that lifting these caps would allow states like New York to produce affordable units on a far larger scale.
Tax-exempt private activity bonds are essential for affordable housing financing because they grant eligibility for Low-Income Housing Tax Credits (LIHTC), a primary funding source for affordable projects. However, the federal volume cap limits the total amount of these bonds that states can issue each year.
With high-demand states like New York typically exhausting their allocation, many “shovel-ready” projects remain stalled. By exempting affordable housing from this cap, the ASAP Act aims to eliminate these bottlenecks, enabling states to address the supply shortage directly.
Housing advocates and industry experts agree that the bill could be transformative.
“This bill would unleash affordable housing development at the scale needed to meaningfully address the nation’s housing supply shortage,” said Rachel Fee, executive director of the New York Housing Conference. “It would represent the most significant federal action on housing supply in decades, precisely at the moment when it’s most urgently needed.
“The ASAP Housing Act will enable us to better leverage a proven financial strategy and build more affordable housing for renters priced out of the market at the lowest incomes.”
New York officials are optimistic about what the act could mean for the state’s housing goals. RuthAnne Visnauskas, Commissioner of New York State Homes and Community Renewal, called the bill “nothing short of a game changer.”
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Eric Enderlin, president of the New York City Housing Development Corporation, highlighted how New York’s consistent exhaustion of its bond cap has limited the state’s affordable housing capacity. He described the bill as essential to freeing up financing for urgently needed units.
The demand for affordable and supportive housing in New York is at a crisis level, with roughly 10,000 households needing supportive housing in New York City alone, compared to the 2,000 units currently available.
Pascale Leone, executive director of The Network, a housing advocacy organization, underscored the urgency of the situation, noting that the lack of financing options has stalled essential projects. The ASAP Act, she argued, would offer a necessary solution to accelerate both new construction and preservation of affordable housing.
“The demand for supportive and affordable housing vastly outpaces the available supply, as the city faces historic lows in affordable housing vacancies,” added Pascale Leone, executive director at housing advocacy organization The Network. “We need to ensure that the State and City’s major commitments to collectively create 35,000 units of supportive housing are on track, and the insufficient capital financing resources to build the housing we need at scale poses a serious risk.”
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