We can end New York's affordable housing crisis. Congress must come through | Opinion

Despite the uncertainty and political infighting in Washington right now, we can be certain of one simple fact: New Yorkers are counting on their representatives to make the Empire State a more affordable place to call home. After decades of inaction from Washington, New Yorkers deserve a real solution to a worsening crisis.

For a few weeks, it looked like they might get one. The Build Back Better plan originally included $330 billion in housing funding — a truly historic investment that would transform American society and actually meet the scale of the crisis we face. Unfortunately, that funding is now at serious risk of being cut. New York’s federal delegation, which includes some of America’s most influential and powerful politicians, cannot let this once-in-a-lifetime opportunity go to waste. If they do, they may never get another chance to solve this crisis.

Of particular importance is a small but impactful tweak to the way the Low-Income Housing Tax Credit is financed and operated. The credit is responsible for nearly all new affordable housing construction across America, including in New York, making it a vital tool in our fight for a more affordable society.

At the same time, an outdated provision in the LIHTC is limiting its impact and ultimately limiting production. Affordable housing is mostly financed with tax-exempt private activity bonds, which are responsible for about 10,000 new and preserved units in New York — and it is possible to be doing even more.

Utilizing PABs allow multifamily rental housing projects to access low-interest financing and generate the as-of-right 4% LIHTC credits, which helps make affordable housing financially feasible. An outdated statutory program rule, however, requires that 50% of a development’s cost be financed via PABs before it can access the LIHTC credit.

That arbitrary, unnecessarily high threshold means that many projects utilize more bonds than they need to finance the project in the long term — which, when coupled with a federally-imposed cap on the number of PABs a state can allocate per year, actually limits affordable housing production. New York, which has one of America’s most severe housing crises, utilizes 100% of its PAB cap on housing.

This bureaucratic inefficiency is one of the main barriers to increasing the supply of affordable housing in New York. In a state that’s short more than 600,000 units of affordable housing, that is inexcusable.

The reconciliation bill would change that by lowering the “test” to 25%, which would unlock a historic amount of resources for affordable housing in New York. According to estimates from Novogradac, this change, combined with other fixes to LIHTC included in the bill, could help finance over 1.38 million additional affordable homes in the United States over the next 10 years to house over 3.2 million low-income individuals. New York could see an additional 82,000 affordable homes over the same time period. It would also provide significant economic stimulus for the state including 124,000 jobs, almost $14 billion in business income and over $4.8 billion in revenue.

This is a historic opportunity. Although there has historically been bipartisan support for this common-sense solution, the proposal has never meaningfully advanced — a reminder that we cannot squander this chance to make New York more affordable right now.

New York’s federal delegation must ultimately answer to a constituency that is struggling with a worsening housing affordability crisis. If they let a generational opportunity go to waste, and let their communities continue to become less affordable, they will have nobody to blame but themselves.

Rachel Fee is the executive director of the New York Housing Conference, a housing policy and advocacy organization.