COMMUNITY DEVELOPMENT AND HOUSING 

LOW-INCOME HOUSING TAX CREDIT VOLUME INCREASE AND TAX-EXEMPT PRIVATE ACTIVITY BOND VOLUME CAP INCREASE

WHEREAS, the Low-Income Housing Tax Credit is the primary tool for producing rental housing across the country; and

WHEREAS, since 1987, more than $3 billion in housing tax credits have been allocated to help finance more than 900,000 multifamily housing units for lower-income persons; and

WHEREAS, it is estimated that in 1997 demand for housing tax credits outstripped supply by more than 3 to 1; and

WHEREAS, the Low-Income Housing Tax Credit has lost purchasing power due to remaining at the $1.25 per capita since it was enacted in 1986; and

WHEREAS, legislation has been introduced that would increase the tax credit volume cap from $1.25 per capita to $1.75 per capita, while indexing it for inflation; and

WHEREAS, tax-exempt private activity bonds foster public-private partnerships in a variety of areas including housing and economic development; and

WHEREAS, the Tax Reform Act of 1986 imposed a unified statewide volume cap on tax-exempt private activity bonds, including Mortgage Revenue Bonds,"Small Issue" Industrial Development Bonds, multifamily housing bonds, student loan bonds, and certain exempt facilities; and

WHEREAS, the 1986 tax act set the statewide volume cap at the greater of $250 million per state or $75 per capita, with those amounts declining to $150 million per state or $50 per capita, based on an assumed "sunset" on the authority to issue Mortgage Revenue Bonds and Small Issue Industrial Bonds; and

WHEREAS, over the past decade the purchasing power of the volume cap has declined by an estimated 45% due to the cumulative effect of inflation, while demand has risen sharply; and

WHEREAS, legislation has been introduced to increase the cap to the greater of $250 million per state or $75 per capita and index it to inflation thereafter,

NOW, THEREFORE, BE IT RESOLVED that The U.S. Conference of Mayors supports legislation that would increase the low-income housing tax credit volume cap from $1.25 per capita to $1.75 per capita, while indexing it for inflation; and

BE IT FURTHER RESOLVED that The U.S. Conference of Mayors also supports legislation to increase the statewide private volume cap to the greater of $250 million per state or $75 per capita.