UPDATED: July 9
We are all desperate for some good news these days. I imagine that is why some in the housing world are touting the housing provisions in the budget reconciliation bill, which contained many of the president’s top policy objectives and which was signed into law on July 4. The most notable provision, they say, is a significant and long overdue expansion of the Low-Income Housing Tax Credit, which funds a majority of new affordable housing projects in the United States.
David Dworkin, president and CEO of the National Housing Conference, wrote in an NHC Member Brief in May that the housing provisions of the bill “would be the most consequential and positive housing legislation this century, IF enacted into law.” Dworkin went on to say, however, that the bill could suffer the “same fate” as President Biden’s Build Back Better Plan, and not be passed, “resulting in the loss of the housing provisions.” The implication was strongly that the bill not passing would be a bad thing for housing.
“Maybe this isn’t a perfect bill, but it is a remarkable achievement and a landmark moment for the affordable housing and community development community,” wrote Thom Amdur of Lincoln Avenue Communities on LinkedIn after the bill was signed.
I appreciate the desire to look for silver linings. Certainly this bill is better with the housing provisions in it than it would be without them. And those provisions without the rest of the bill would indeed be consequential and positive.
But to imply that the passage of this bill is a net win for affordable housing is extremely shortsighted.
That’s because the $3 trillion bill’s devastating cuts to Medicaid and SNAP, enacted to free up funds for tax cuts for the ultra-rich, will bring about widespread job loss and a surge in poverty, causing the number of people who cannot afford housing to soar far beyond what the new housing provisions could address. (That is especially true in this era of surging construction costs thanks to tariffs and the decimation of the construction workforce.)
Not only will incomes for lower-income people drop directly as a result of the bill’s provisions, wages and GDP will fall, and many people’s student loan payments will skyrocket. Medical bankruptcies, which were halved after the Affordable Care Act was passed, will increase again. The Commonwealth Fund, an independent research organization, estimates that over 1 million jobs will be lost as result of the cuts to Medicaid and SNAP. Commonwealth also finds that the direct cost to states will outstrip the savings to the federal government, hampering the states’ ability to mitigate the harm caused, and that the likelihood of a recession will increase markedly.
Making Medicaid harder to get will disrupt the process of getting people out of homelessness, notes the Urban Institute, as well as remove a major funding source for supportive housing.
Medicaid cuts mean nursing homes will close, turning people out onto the streets, or sending them home to family caregivers who will have to give up their jobs, and possibly therefore their own medical care, to take care of them. More details on the the extent of the harm will emerge once the final version is analyzed and implementation begins, but one thing is clear: an expansion of LIHTC in the face of the wreckage this bill will cause is like adding a second Band-Aid to a crushed skull. To consider the bill a win is a betrayal to the people the affordable housing field serves.
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Well said Miriam. It has been disheartening to see some affordable housing “leaders” cheer the bill for its LIHTC expansions without even criticizing the draconian cuts to Medicaid and SNAP. As you suggest, the net impact of the bill will be strongly negative and worsen the housing affordability and stability, and financial situation, of millions of households. Ironically, it is also likely to hurt tenants of many LIHTC properties and therefore create financial stress on such properties.
Good point, Dan, about the effect directly on LIHTC properties too!
I’m trying to find out about housing assistance the HUD section 8 specifically will there be housing assistance and grants to the states to cover these costs or will have the states have to take on the assistance if they want to please reply thank you very much Scott in Utah
I neglected to read all of your article I see that the grant will be cut in half so my big question to you is when do these cuts take effect are they going to wait till after the election in 26 or is it effective now thank you for your reply Scott
I live in independent disabled agree those Snap and medicaid cuts woukd hurt the disabled communities that do not have any family at all. It’s appalling to say families have 2 dif deep are any Republicans kids disabled in bet not and expanding the housing but cutting things that help keep those individual healthy. I know people are saying disabled would be okay. I cannot believe some of this something like this happened after Vietnam sate run facilities were closed because of horrible conditions and families had 2 pick up pieces late 70’early 80′ I’m 35 and a double amputee the mostly voted for thos man not knowing 1,000 of people on street will definitely make There lives harder Impeach Impeach and Impeach! wheelchair Activist!
See above
Yes, well said. I still don’t understand how or why the Bill included this expansion to LIHTC. I understand its value, but what was the rationale of the Bill’s authors?
Completely agree this bill is a significant net loss for community members living in or needing affordable housing. Further, LIHTC alone is not good at all at getting to and sustaining deeper housing affordability, and the federal housing programs that subsidize LIHTC to get there are also on the chopping block.
Thank you, Miriam. The touting of the expansion of LIHTC as a win in this bill made me sad. After all these years, affordable housing developers still don’t seem to understand that what hurts their current and future tenants is just bad for their business. As the LIHTC advocates were pushing to get this expansion in the bill, how much time and effort did they contribute to opposing the really harmful parts of the bill?
People who work and have a devent income should have acccess to rhe same housing pool as those in low income categories.
Many of the tax credit properties are more modern and affordable than what i get for market rate units. That is Grossly Unfair.
Income qualifying limits should be eliminated.
Hi Scott, the proposed cuts to Section 8 and other rental assistance are not in the reconciliation bill, they have only been proposed in the president’s FY 2026 budget. (So they can still be prevented by Congress.)
The cuts to Medicaid and SNAP that were in this bill that passed will not primarily take effect until after the 2026 elections (to avoid angry backlash about them, presumably).
Yes, I’m 77 years of age on home care, lining in a 30% LIHTC unit that will become unaffordable if my housing voucher is cut. At the same time, our Section 202 supportive housing for seniors is threatened too. My local Tenant Resource Center advised me to move into a lower cost of living area, but with paying more for healthcare and food, I cannot afford to more. We all need our Medicaid & Food Share to be able to absorb any loss of Section 8 housing vouchers! I’m afraid we are going to see white hair & wheelchairs in tent cities during Trump’s administration.
Dear Miriam,
A big thank you to you for highlighting the structural problems with cutting various low-income sources of funds and benefits that are essential to the budgets of many LIHTC residents. So much is unknown at this time relative to HUD and USDA programs. However, taking into account the overall directed cruelty of Presidential dictates and Cabinet members competing with each other on who can do the most harm to the most low-income people, the future looks grim. The future planned cuts are intended to decimate the wide safety nets established over decades. I regret that Charles Dickens is not around to highlight the scale of poverty projected to occur. Miriam, you gave us a great start for the needed critique.
everyone wanted trump back in well this is what he is about take from the poor give to the rich. for the ones who back him yea you deserve everything he puts out but the ones who dont we have to suffer because of it i truly believe trump needs to be put under a jail and the key deep in a trash pile. we need to get him out he has no mind or soul to rule this country he’s just as gone in the head as joe was. just what i think