Fighting for the Trust Fund

When we reported earlier this year on the often-frustrating saga of finding a legislative home for the as yet unfunded National Housing Trust Fund (NHTF) created by the Housing and Economic Recovery Act of 2008, we were hopeful. Still, considering this Congress, we could have guessed that it would be an uphill battle. Now, with Congressman Ed Royce (R-Calif.) characterizing the NHTF as a “slush fund for special interest housing groups” and saying he plans to introduce a bill to eliminate it, it’s not just uphill, but a battle of priorities and principle.

In late May, Sheila Crowley, president of the National Low Income Housing Coalition (NLIHC), testified before the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises (of which Royce is a member) at a hearing titled “Transparency, Transition and Taxpayer Protection: More Steps to End the GSE Bailout.” She argued that the trust fund and its goal of ending the shortage of affordable homes for the lowest-income Americans “is a proper role for government,” adding that the market “will not fill this gap.”

Despite the most recent attack by the likes of Rep. Royce, NLIHC is not just playing defense. In June, Crowley described a plan to generate funding for affordable housing by reforming the mortgage interest deduction, the country’s largest housing subsidy. Speaking at the release of State of the Nation’s Housing: 2011, she argued that changing the MID to a 15 percent credit and lowering the cap from $1 million to $500,000 would not only simplify the tax code, but make available $30 billion to build affordable rental units—all while being deficit neutral. It would also dramatically increase the number of people getting a tax benefit.

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