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Special Reports Analysis of the DASh Act Comprehensive Housing Legislation Would Finance the Creation and Rehabilitation of Nearly 2 Million Affordable Homes
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ISBN: 978-1-956596-01-4Table of Contents
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
History of the DASH Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Major DASH Act Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Low-Income Housing Tax Credit Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Middle Income Housing Tax Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Homeownership: Neighborhood Homes Tax Credit and First-time
Homebuyer Tax Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Renter Tax Credit, Special Incremental Housing Choice Vouchers,
and Other Spending Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Outlook/Next Steps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
DASH Act: Comprehensive Housing Legislation Would Finance the 1
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable HomesExecutive Summary
The Decent, Affordable, Safe Housing for All (DASH) Act, announced by Senate Finance Committee
chairperson Sen. Ron Wyden, D-Oregon, on August 18, is a sweeping proposal that seeks to address the
affordable housing needs of renters and homeowners alike. The legislation is expected to be formally
introduced September, when the Senate returns from recess; accompanying the bill text, a bill summary
and detailed section-by-section summary were released as part of the announcement.
The country’s affordable housing and homelessness crises, particularly as they pertain to children, call for
a comprehensive, multipronged approach and Wyden has long envisioned the DASH Act being a valuable
tool. To address the affordable housing crisis facing low- and moderate-income renters, the DASH Act
proposes numerous provisions to enhance the low-income housing tax credit (LIHTC), as well as a
middle-income housing tax credit (MIHTC). Difficulties obtaining affordable housing is not just an issue
for renters, and the DASH Act includes the Neighborhood Homes Investment Act (NHIA), which would
establish a new tax credit–the Neighborhood Homes Tax Credit (NHTC)–to build or rehabilitate owner-
occupied homes in distressed areas. Through the primary LIHTC unit-financing, MIHTC and NHTC
provisions, Novogradac estimates nearly 2 million additional affordable homes can be financed.
Besides the homes that can be financed through the renter and homeownership tax credit proposals,
Novogradac has estimated the additional benefits that can be realized as a result of enacting the LIHTC,
MIHTC and NHTC provisions.
Affordable Homes Created and Overall Economic Impact
Due to DASH Act Provisions Over 10 Years
Wages &
Dash Act Provisions Rental Homes Jobs Taxes
Business Income
LIHTC Proposal 1,099,500 1,652,700 $186,796,239,000 $64,703,002,000
MIHTC Proposal 344,100 560,400 $63,473,156,600 $22,030,191,800
NHTC Proposal 500,000 786,000 $4,290,000,000 $29,300,000,000
Total 1,943,600 3,060,300 $261,458,893,600 $118,418,740,000
Source: Neighborhood Homes Coalition; Novogradac
DASH Act: Comprehensive Housing Legislation Would Finance the 2
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable HomesStates that Would See the Largest Increase in Affordable Rental Homes
Due to DASH Act LIHTC and MIHTC Provisions
Additional Homes
Over 10 Years
1 California 211,900
2 Texas 113,600
3 Florida 90,200
4 Georgia 89,100
5 New York 83,200
6 Illinois 49,700
7 Tennessee 43,500
8 Washington 42,700
9 Maryland 41,500
10 Virginia 41,000
11 Pennsylvania 40,200
12 Michigan 38,400
13 Massachusetts 35,900
14 Ohio 34,900
15 North Carolina 34,000
16 Indiana 30,400
17 Colorado 29,900
18 New Jersey 28,800
19 Arizona 28,500
20 Minnesota 25,700
Source: Novogradac
Background
History of the DASH Act
Wyden has been developing the DASH Act for several years. Prior to ascending to chairperson of the
Senate Finance Committee, Wyden spoke repeatedly about his desire to introduce the bill if and when
he became chair. With Democrats holding the majority in the Senate, Wyden has now made good on his
promise to introduce the bill meant to be instrumental in ensuring no child is homeless.
Many of the provisions of the DASH Act will be familiar to affordable housing advocates as the bill draws
on other significant legislation such as H.R.2 (116th Congress), the Moving Forward Act, the $1.5 trillion
infrastructure bill passed the House July 2020, S. 4078 (116th Congress), the Emergency Affordable
Housing Act of 2020, which essentially served as a Senate companion to the H.R. 2 LIHTC provisions,
and the Affordable Housing Credit Improvement Act (AHCIA, H.R. 2573, S. 1136). The AHCIA has been
introduced in four consecutive sessions of Congress and the DASH Act draws heavily from the 2021
iteration. Prior to its inclusion in the DASH Act, MIHTC legislation was introduced by Wyden in both the
114th Congress (S. 3384) and the 115th (S. 3365). The NHIA was introduced separately as H.R. 2143, S. 98,
while the renter tax credit in the proposal, which would assist extremely low-income renters, is identical
DASH Act: Comprehensive Housing Legislation Would Finance the 3
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable Homesto S. 2554, the Renters Tax Credit Act of 2021, introduced July 29 by Wyden and Sen. Sherrod Brown,
D-Ohio.
More recently, numerous DASH Act provisions have been included in the House Ways and Means
Committee’s $1.2 trillion portion of the fiscal year 2022 Build Back Better reconciliation legislation,
which was approved Sept. 15. The approved legislation includes similar LIHTC provisions, described in
detail below, and also proposes a new NHTC.
In the sections that follow, additional details are provided on the legislative history of the LIHTC, MIHTC
and NHIA/NHTC, as well as research that substantiates the need for the affordable housing provisions of
the DASH Act.
Major DASH Act Provisions
Low-Income Housing Tax Credit Proposals
The LIHTC is by far the largest source of capital for financing the production and preservation of
affordable rental homes and, as such, improvements to the incentive will significantly increase the
number of households that can be assisted. The DASH Act includes more than a dozen proposals to
enhance the incentive’s reach. A number of provisions were analyzed to determine the additional
affordable rental homes that could be financed through enactment:
• Temporarily lower the 50% test to 25%. Lowering the “financed-by” threshold from 50% to 25%
for private activity bond (PAB) financed housing for 2021-24 multifamily PAB issuances only and
placed in service after Dec. 31, 2021.
• Increase in 9% LIHTC allocations. The 12.5% temporary allocation increase in the 9% LIHTC
passed in 2018 and scheduled to expire at the end of this year would be made permanent. There would
be two annual 25% increases to the 2021 9% LIHTC allocation–$2.81 per-capita with $3,245,625
small state minimum under current law–an inflation adjustment for 2022, and a 10% increase on that
adjusted amount for the extremely low-income (ELI) increase. The DASH Act would increase annual
9% LIHTC allocations to:
• $3.88 per capita with a $4,462,734 small state minimum for 2021,
• $4.92 per capita with a $5,670,462 small state minimum for 2022, and
• Inflation adjustments based on this new baseline for 2023 and thereafter.
• ELI boost and set-aside. The DASH Act proposes an up to 50% basis boost for properties that
include units specifically for ELI households (those earning the greater of the federal poverty line or
30% of the area median income). To qualify for the proposed 50% basis boost, at least 20% of the
units in the property would be required to be set aside for ELI households and the increased boost
DASH Act: Comprehensive Housing Legislation Would Finance the 4
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable Homesis available only for those units set aside for ELI households. Also, not more than 90% of 9% LIHTC
allocations could be for buildings that reserve less than 20% of their units for ELI households.
• Additional 30% Basis Boosts. Three provisions would increase the amount of tax credits available
to eligible properties:
• Native American Boost. Native American areas would be designated difficult development areas
(DDA). Under current law, a 30% basis boost is allowable for properties financed by 4% LIHTC
located in a DDA.
• Rural Basis Boost. Rural areas would also be designated as DDAs, thus making properties eligible
for a 30% basis boost.
• Discretionary Boost. The bill would extend the current law discretion LIHTC allocating agencies
have to provide a 30% basis boost to properties financed by 9% LIHTC to those financed by PABs
using 4% LIHTC.
In addition to these major unit financing provisions, which are covered in more detail below, the DASH
Act would also:
• Extend the period for rehabilitation expenditures. The deadline for rehabilitation
expenditures would be extended to 36-months, up from 24-months, for buildings receiving a LIHTC
allocation after Dec. 31, 2017 and before Jan. 1, 2023.
• Extend the deadline for basis expenditures. The timeframe for placing a building in service
after an allocation of LIHTCs would be extended from two years to three years. The deadline for the
so-called “10% test” in which a 9% LIHTC property must incur 10% of its costs during the year in
which the tax credits are allocated or within six months within issuance of the carryover allocation,
would be extended from one to two years for properties receiving allocations after Dec. 31, 2017 and
before Jan. 1, 2023.
• Qualified contract reform. The use of qualified contracts would be limited by repealing the option
for future allocations received or credit allocations determined after Dec. 31, 2021, and changing the
formula that determines purchase price on existing properties.
• Right of first refusal reform. The right of first refusal (ROFR) for nonprofit general partners
would be changed to a purchase option for properties receiving LIHTC allocations after Dec. 31, 2021,
and would clarify that the right of first refusal for existing LIHTC properties includes the partnership
interest and assets related to the property, and that nonprofit general partners could exercise their
right of first refusal with or without the approval of the limited partner and in response to any offer,
including one by a related party to the general partner.
• Prohibition of local approval and contribution requirements. Qualified allocation plan
selection criteria would be prohibited from including local approval and contribution requirements for
allocations made after Dec. 31, 2021.
DASH Act: Comprehensive Housing Legislation Would Finance the 5
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable Homes• COVID-19 relief through provision of additional LIHTC award. A 150% adjuster for the first
or second taxable year of credit period, with pro rata reduction in subsequent years, would be provided
to address issues related to COVID-19. This proposal would apply only to buildings whose first year
of the credit period ends on or after July 1, 2020, and before July 1, 2022, and pandemic-related
construction or leasing delays have occurred since Jan. 31, 2020.
• Basis boost for providing low-income housing supportive services. A 50% basis boost
would be provided for that portion of a building that comprises the area of the property dedicated to
the provision of variety on-site supportive services, including health services, coordination of tenant
benefits, job training, financial counseling, resident engagement services, or services aimed at helping
tenants retain permanent housing and promoting economic self-sufficiency.
• Study on a new tax credit to facilitate conversion of commercial to residential property.
A cost-benefit analysis would be undertaken on the provision of tax incentives to owners of vacant,
underutilized commercial properties in exchange for selling to housing finance agencies. The
properties would be converted to affordable rental housing for low-income residents, including shelters
for the homeless. The study would be required within six months of enactment of the DASH Act.
Nearly 1.1 million Affordable Rental Homes Could be Financed
Novogradac analyzed the impact of enacting the primary unit financing LIHTC provisions of the DASH
Act and found that an estimated 1,099,000 additional affordable rental homes could be financed over
10 years if the bill were enacted. Based on research conducted by the National Association of Home
Builders, Novogradac estimates those nearly 1.1 million homes could house more than 2,560,000 million
low-income people. Through the financing of these additional affordable homes, the DASH Act would
go a long way in assisting the millions of low-income households who are cost burdened, cannot find
affordable housing, or are experiencing homelessness.
Proposed Increase in Affordable Rental Homes Financed
Due to DASH Act LIHTC Provisions over 10 Years
25% Test 9% Allocation
4% Basis Boosts* ELI Basis Boosts** Total
(Temporary) Increase ***
454,500 222,600 124,000 298,500 1,099,500
* The 4% Basis Boosts include: a discretionary 30% basis boost for PAB-financed properties; a 30% basis boost for properties in rural areas; and, a
30% basis boost for properties in Native American areas.
**This estimate includes ELI units for 4% and 9% developments.
***This excludes the 9% ELI units accounted for under ELI Basis Boosts category.
Source: Neighborhood Homes Coalition; Novogradac
About these Estimates
The estimates presented in this discussion are part of Novogradac’s ongoing analysis of rental housing
provisions included in proposed legislation to enhance and expand the LIHTC and PAB rental home
DASH Act: Comprehensive Housing Legislation Would Finance the 6
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable Homesfinancing. For each estimate detailed below, several steps were taken to arrive at the additional affordable
rental homes projected to be financed. In the case of each set of estimates, certain provisions provide
the foundation upon which additional analysis is based. For 9% estimates, the analysis assumes the
temporary 12.5% allocation increase expiring at the end of 2021 is made permanent, which is a provision
of the DASH Act. Additionally, all of the estimates assume that gap financing is scalable with the
increased availability of LIHTC equity and PAB debt. The scalability of gap financing applies more so
to 4% LIHTC properties than to the 9% discussions that follow, because the 4% LIHTC is a shallower
subsidy than the 9% LIHTC.
DASH Act Provisions Would Support Increased LIHTC, PAB Activity
Temporarily Reduce the Financed-By Threshold
The DASH Act proposes temporarily reducing the PAB “50% test” to 25%. The 50% test refers to the
requirement for PABs to finance at least 50% of aggregate basis of affordable housing properties to qualify
for the maximum amount of 4% LIHTCs. Novogradac estimates lowering the threshold from 50% to 25%
could generate an additional 454,500 affordable rental homes financed by 2021-2024 multifamily PAB
issuances over a decade.
The analysis presumes the “freed” bond cap that would result from the reduction in the financed-by
threshold would be used for affordable rental housing (as opposed to other allowable PAB uses) and that
gap financing was scalable. The AHCIA proposed a permanent reduction of the financed by threshold to
25%, thereby facilitating the financing of nearly 1,500,000 affordable rental homes over a decade.
Previous Novogradac analysis commissioned by the National Council of State Housing Agencies
(NCSHA), in both a 2020 report and a 2021 update, analyzed the effects of lowering the threshold test. To
estimate the number of rental homes that could be financed, Novogradac developed a pro forma model
that establishes national baseline percentages for the sources and uses of financing for PAB financed
LIHTC developments. This model is based on NCSHA Annual Factbook data available for 2016, 2017,
2018 and 2019 (the four most recent years available at the time of writing). The model is also informed
by the review of final cost certification data from a national sample of PAB-financed developments. The
pro forma model has distinct estimates for new construction, substantial rehabilitation and acquisition/
rehabilitation developments.
Provide Additional 30% Basis Boosts
Novogradac estimates that nearly 223,000 additional affordable rental homes could be financed over
2022-31 by enacting the DASH Act’s 30% basis boost provisions that primarily affect the 4% LIHTC. As
with the AHCIA, the additional basis boost provisions included in the DASH Act would expand upon
existing boosts already allowed under current law. Basis boosts allow a LIHTC property to generate more
DASH Act: Comprehensive Housing Legislation Would Finance the 7
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable Homesequity, thus increasing a property’s maximum LIHTC allocation. This increase in equity makes new
construction or rehabilitation of an existing property more financially feasible. The proposed basis boosts
would be effective for buildings placed in service after Dec. 31, 2021.
The three primary boost provisions are:
1. Discretionary boost. The DASH Act would extend the discretion LIHTC allocating agencies have
to provide a 30% basis boost to properties financed by 9% LIHTC to those financed by PABs using 4%
LIHTC.
2. Rural boost. A basis boost is currently provided for properties located in a DDA. The DASH Act
would expand upon this by including all nonmetropolitan counties and rural areas, as defined by
Section 520 of the Housing Act of 1949, which defines the eligibility of U.S. Department of Agriculture
(USDA) rural housing programs, as DDAs. Including all nonmetropolitan areas would result in all
1,971 non-metro counties in the U.S. being eligible for the 30% boost, as opposed to the 355 non-
metro counties currently designated as DDAs. Extending the boost eligibility to all rural areas–non-
metro counties and areas in metropolitan counties of a rural nature–further increases the number of
properties eligible for a basis boost.
3. Native American boost. Including Native American areas as DDAs, as proposed by the DASH Act,
would help to alleviate one of the difficulties specifically related to development in these areas, namely
the ability to obtain debt. Because land belonging to reservations cannot be used to collateralize a
loan, and also cannot be sold, it is difficult to obtain debt for properties in Native areas. The additional
LIHTCs that would result from this particular basis boost would help to address affordable housing
needs on tribal lands by reducing the amount of debt a development would need to take on, thus also
reducing the risk to the lender.
9% Allocation Increase
Novogradac estimates that increasing the 9% allocation annually by 25% plus inflation in both 2021 and
2022 could finance 298,500 additional affordable rental homes over 2022-31. This estimate excludes
units in 9% LIHTC properties receiving the 50% ELI basis boost described below. The DASH Act would
increase the annual 9% LIHTC allocation from $2.81 per-capita with $3,245,625 small state minimum
under current law, to:
• $3.88 per capita with a $4,462,734 small state minimum in 2021,
• $4.92 per capita with a $5,670,462 small state minimum in 2022, and
• Annual inflation adjustments to the new, higher baseline in 2023 and thereafter.
The DASH Act proposal mirrors the 2021 AHCIA provision and the H.R. 2 (116th)/Moving Forward Act in
that a substantial increase in LIHTC allocations would be phased in over two years, compared to the 2019
DASH Act: Comprehensive Housing Legislation Would Finance the 8
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable HomesAHCIA, which would have phased in the 9% allocation increase over five years. Unlike AHCIA, but
similar to H.R. 2 (116th), the DASH Act also calls for further 10% increase in 9% allocations, although
the 10% increase in H.R. 2 (116th) was applied to not just the population-based allocations, but also
carryover, returned, and national pool allocations. The 10% increase in allocations was proposed in the
DASH Act to ensure the ELI basis boost does not reduce 9% LIHTC unit financing. In both cases, the
estimated additional rental homes financed assumes the temporary 12.5% increase in LIHTC allocation
authority enacted in 2018 and expiring at the end of 2021 would be made permanent.
9% LIHTC Allocations DASH Act 2031
Proposed $5.80
9% Increase
2022
$4.92
Maximum non-ELI
2021 allocations
$3.88
FY18 2031
Omnibus $3.20
HERA 2018
2009 $2.70
2008 $2.30 2021
$2.20 $2.81 2022
2002 $2.60
$1.75 2010
Per capita credit $2.10
$20
set at $1.25
$15
DASH Act Proposed 9% Increase
Billions
$10
$5
ACTUAL PROJECTED
PROJECTED
$0
1987-2000 2005 2010 2015 2020 2025 2030
Source: Novogradac
DASH Act: Comprehensive Housing Legislation Would Finance the 9
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable HomesProvide a 50% Boost for ELI units and Set Aside at least 10% of 9% LIHTC Allocations
for Buildings with at Least 20% ELI Units
Novogradac estimates the DASH Act’s 50% ELI basis boost proposal could finance an additional 124,000
affordable rental homes in 4% and 9% LIHTC properties over 2022-2031. This estimate includes ELI
units in 9% properties not accounted for under the 9% allocation increase estimate above. The DASH
Act states that not more than 90% of 9% LIHTC allocations can be for buildings that reserve less than
20% of their units underwritten for ELI households. ELI households are those earning at or below the
greater of 30% of the area median income or the federal poverty line. To qualify for the proposed 50%
basis boost, at least 20% of the units in the property would have to be underwritten and set aside for ELI
households and the increased boost is available only for those units set aside for ELI households. Both
4% and 9% developments could qualify for this basis boost, but it will be more much more difficult for 4%
LIHTC properties to meet the requirement to set-aside at 20% of their units for ELI households given the
much shallower subsidy. It should be noted the ELI boost would not increase the amount of 9% LIHTC
allocations available in the state, but rather would allow states to provide more 9% allocation from their
fixed state ceiling in any one particular property than is possible under current law. States would need to
consider competing priorities to address affordable rental housing needs across the state before making
allocations to ELI buildings.
Given the deep subsidies required to make rental homes affordable to ELI households, additional tools,
such as the targeted 50% basis boost proposed, are needed to make properties financially feasible. The
purpose of the 50% ELI basis boost is to reduce hard debt as much as possible to offset for the reduction
in income generated by the lower rents charged to the ELI rental homes. Novogradac estimated the
number of rental homes that could be financed with the increased equity and lower debt service. In the
case of 4% LIHTC properties, the ELI basis boost would likely be used in properties financed under
the Rental Assistance Demonstration program, with its focus on preserving public housing properties
by leveraging private investment, or other properties located in communities with high area median
incomes.
DASH Act: Comprehensive Housing Legislation Would Finance the 10
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable HomesImpact for States
Below are the states that Novogradac projects could gain the largest number of affordable rental homes:
States Seeing the Largest Increase in Affordable Rental Homes
Due to DASH Act LIHTC Provisions
Additional Homes
Over 10 Years
1 California 165,100
2 Texas 86,800
3 Georgia 72,200
4 Florida 66,500
5 New York 63,600
6 Illinois 36,500
7 Tennessee 34,400
8 Washington 33,500
9 Maryland 32,800
10 Virginia 30,800
11 Pennsylvania 28,800
12 Michigan 28,300
13 Massachusetts 28,100
14 North Carolina 25,300
15 Ohio 25,100
16 Colorado 23,600
17 Indiana 23,600
18 Arizona 21,900
19 New Jersey 21,400
20 Minnesota 20,200
Source: Novogradac
The table that follows lists Novogradac’s estimates of affordable rental homes, jobs and economic impact
over 10 years break down by state:
Wages &
State Rental Homes Jobs Taxes
Business Income
Alabama 7,400 11,500 $1,303,755,200 $451,569,300
Alaska 1,600 2,500 $281,893,000 $97,636,600
Arizona 21,900 34,100 $3,858,410,600 $1,336,401,000
Arkansas 8,000 12,500 $1,409,465,100 $488,183,000
California 165,100 257,400 $29,087,835,300 $10,074,876,600
Colorado 23,600 36,800 $4,157,922,000 $1,440,139,800
Connecticut 11,400 17,800 $2,008,487,700 $695,660,800
Delaware 3,600 5,600 $634,259,300 $219,682,300
District of Columbia 16,300 25,400 $2,871,785,100 $994,672,900
Florida 66,500 103,700 $11,716,178,400 $4,058,021,200
DASH Act: Comprehensive Housing Legislation Would Finance the 11
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable HomesWages &
State Rental Homes Jobs Taxes
Business Income
Georgia 72,200 112,600 $12,720,422,200 $4,405,851,500
Hawaii 6,800 10,600 $1,198,045,300 $414,955,500
Idaho 3,200 5,000 $563,786,000 $195,273,200
Illinois 36,500 56,900 $6,430,684,400 $2,227,334,900
Indiana 23,600 36,800 $4,157,922,000 $1,440,139,800
Iowa 9,200 14,300 $1,620,884,800 $561,410,400
Kansas 4,400 6,900 $775,205,800 $268,500,600
Kentucky 16,600 25,900 $2,924,640,000 $1,012,979,700
Louisiana 11,800 18,400 $2,078,961,000 $720,069,900
Maine 1,400 2,200 $246,656,400 $85,432,000
Maryland 32,800 51,100 $5,778,806,800 $2,001,550,300
Massachusetts 28,100 43,800 $4,950,746,100 $1,714,742,800
Michigan 28,300 44,100 $4,985,982,700 $1,726,947,300
Minnesota 20,200 31,500 $3,558,899,300 $1,232,662,100
Mississippi 5,300 8,300 $933,770,600 $323,421,200
Missouri 7,900 12,300 $1,391,846,800 $482,080,700
Montana 2,800 4,400 $493,312,800 $170,864,000
Nebraska 2,900 4,500 $510,931,100 $176,966,300
Nevada 11,300 17,600 $1,990,869,400 $689,558,500
New Hampshire 1,900 3,000 $334,748,000 $115,943,500
New Jersey 21,400 33,400 $3,770,319,100 $1,305,889,500
New Mexico 7,900 12,300 $1,391,846,800 $482,080,700
New York 63,600 99,100 $11,205,247,300 $3,881,054,800
North Carolina 25,300 39,400 $4,457,433,300 $1,543,878,700
North Dakota 1,800 2,800 $317,129,600 $109,841,200
Ohio 25,100 39,100 $4,422,196,700 $1,531,674,100
Oklahoma 11,200 17,500 $1,973,251,100 $683,456,200
Oregon 13,700 21,400 $2,413,708,900 $836,013,400
Pennsylvania 28,800 44,900 $5,074,074,200 $1,757,458,800
Rhode Island 3,200 5,000 $563,786,000 $195,273,200
South Carolina 10,000 15,600 $1,761,831,300 $610,228,700
South Dakota 2,000 3,100 $352,366,300 $122,045,700
Tennessee 34,400 53,600 $6,060,699,800 $2,099,186,900
Texas 86,800 135,300 $15,292,696,000 $5,296,785,500
DASH Act: Comprehensive Housing Legislation Would Finance the 12
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable HomesWages &
State Rental Homes Jobs Taxes
Business Income
Utah 16,900 26,300 $2,977,495,000 $1,031,286,600
Vermont 1,700 2,700 $299,511,300 $103,738,900
Virginia 30,800 48,000 $5,426,440,500 $1,879,504,500
Washington 33,500 52,200 $5,902,135,000 $2,044,266,300
West Virginia 2,300 3,600 $405,221,200 $140,352,600
Wisconsin 19,200 29,900 $3,382,716,200 $1,171,639,200
Wyoming 900 1,400 $158,564,800 $54,920,600
Guam 1,000 1,600 $176,183,100 $61,022,900
Northern Marianas 2,800 4,400 $493,312,800 $170,864,000
Puerto Rico 1,800 2,800 $317,129,600 $109,841,200
Virgin Islands 700 1,100 $123,328,200 $42,716,000
Source: Novogradac
Middle Income Housing Tax Credit
Affordability Issues Affect More Households
In the time that has elapsed since MIHTC was first introduced, the need for targeted assistance to those
households ineligible for LIHTC housing has become even more evident. The LIHTC has successfully
financed the construction and rehabilitation of 3.5 million affordable rental housing units since its
inception. Research shows more households earning just above LIHTC income limits are finding it
difficult to obtain affordable housing. Data from the Joint Center for Housing Studies (JCHS) of Harvard
University’s The State of the Nation’s Housing 2021 shows the percentage of cost burdened households,
those spending 30% or more of their income on rent, who earn $50,000 to $74,999 has increased–in
2001. Twelve percent of these earners were cost burdened, compared to 26% of these households in 2019.
Included in that number are households that earn too much to qualify for LIHTC housing.
JCHS reports have illustrated how the face of renters has been changing. As in the 2020 report, the
most recent State of the Nation’s Housing report finds that the percentage of renters among moderate
income households, those earning $45,000-$74,999 and $75,000 and over, the percentage of renters
increased 21% and 70% from 2004 to 2019, respectively. There was also a year-over-year increase in the
percentage of renters among these income cohorts. The 2021 data also reported an increase in renter
households among those aged 34-64 and households with children from 2004 to 2019. This change in
the composition of renter households has changed the ways in which developers meet supply, with new
additions to supply targeting the higher end of the income scale, leaving those eligible for LIHTC housing
and those earning slightly more than 60% of area median income (AMI), struggling to find housing they
DASH Act: Comprehensive Housing Legislation Would Finance the 13
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable Homescan afford. Looking at the 2021 report, among renter households earning $25,000 to $49,999, 58% were
cost-burdened. As noted above, among households earning $50,000 to $74,999, 26% were cost burdened.
These issues are further exacerbated by the fact that the nation’s affordable rental housing stock is
disappearing. Nearly 4 million low-cost units were lost between 1990 and 2017, and the nation continues
to lose affordable rental homes annually due to market-rate conversion, expiration of federal assistance,
obsolescence and deterioration. JCHS reports that between 2004 and 2019, 2.5 million units with rents
less than $600 disappeared from the housing stock. During the same period, the number of homes
renting for $1,000 or more has increased 99%. Homes renting for $600 to $799 have decreased from
2004 to 2019, putting pressure on those households who may earn too much to be eligible for LIHTC
housing but not enough to find housing they can afford. During this timeframe, shifts were seen in the
rental housing stock, with increases in supply occurring among single-family rental homes and large
multifamily buildings, building types that were prone to significant rent increases. These changes
intensified affordability challenges: the supply of apartments in multifamily buildings with two to four
units, properties that are typically more affordable, fell by 38,000 while there was an increase of 6.6
million rentals among buildings with at least 20 units and among single-family rentals.
With the continued loss of affordable rental homes, more must be done to not only add to the supply
but ensure that homes remain affordable. Those in the housing industry cite a number of remedies to
address the supply issue, such as reforming zoning and land use policies. While these measures could
reduce the costs of rental housing development, they would ensure the long-term affordability of housing.
The MIHTC, just as the LIHTC, would help to protect the supply of affordable rental homes financed as
there are affordability and eligibility requirements that must generally be adhered to for a minimum of
30 years, as described in more detail below. Furthermore, states can require an additional extended use
period, just as with the LIHTC, thus ensuring the continued affordability of rental homes. As research
has shown, rents are increasing across much of the rental housing stock, the supply of affordable homes
is decreasing and new supply is targeted more towards renters at the higher end of the income spectrum.
This loss of affordable homes not only affects future renter households but also those currently residing
in what could be considered affordable homes. By requiring extended use periods those currently housed
in affordable rental homes are protected from being priced out of their homes. That protection has a
stabilizing effect on renters and rental housing markets, which can extend to the communities in which
homes are located, based on the benefits of the LIHTC. Research shows that LIHTC properties increase
property values, reduce poverty concentration, provide access to better schools, and decrease local crime
rates. Additionally, children who grow up in LIHTC properties achieve higher rates of education and
enjoy higher wages in adulthood. It’s likely similar beneficial spillover effects could be expected from
MIHTC investments.
DASH Act: Comprehensive Housing Legislation Would Finance the 14
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable HomesLeading up to the release of the DASH Act, Novogradac prepared a capital analysis for Sen. Wyden that
examined the effect of enacting the then proposed MIHTC. In addition to a pool of tax credit authority
allocated to states, Novogradac’s analysis also examined the potential of a separate pool of tax credits
that would be generated by the allocation of tax-exempt private activity bonds (PABs) and could be used
in conjunction with the 4% LIHTC. Novogradac’s analysis indicates enacting a MIHTC to be used with
LIHTC and PABs would enable developers to finance properties in a variety of markets—from high cost
ones like San Francisco to low cost ones like Boise—with less additional soft financing to fill the financing
gaps, making it much easier to address the severe affordable rental housing shortage in the U.S.
Just Like the LIHTC, MIHTC Would Address Affordable Housing Needs
The MIHTC proposal is based on the LIHTC and picks up where the LIHTC leaves off, with the new credit
being administered by states and encouraging the building of affordable rental housing for households
earning between 60% AMI and 100% AMI, slightly more than the LIHTC income limits. Just as with the
LIHTC, the federal government would allocate tax credits to the states based on population. For 2021, the
allocation would be $1 per capita with a $1.14 million small-state minimum. Inflation adjustments based
on this baseline would be used for 2022 and thereafter. Anticipating the need for additional assistance
in certain hard to develop areas, rural areas (defined as any non-metropolitan area, or any rural area as
defined by Sec. 520 of the Housing Act of 1949) would receive an additional 5 cents per capita above the
2021 allocation to be reserved for middle-income housing developed in rural areas. State agencies would
then allocate the tax credits to developers through a competitive process, allocating only enough credits
as makes a property feasible.
A rental property would need to meet two affordability standards in order to qualify for MIHTCs–a
property would have to include a minimum percentage of affordable units; and, rents for those units
cannot exceed limits based on average incomes in the area. The bill requires at least 60% of the property’s
units must be reserved for individuals with incomes of 100% or less of AMI. Additionally, tenants’
rents must not exceed 30% of 100% of AMI. States could set limits for incomes below the maximum,
for example, designating units at 90% AMI. Similarly, state could set rent restrictions equal to 30% of
applicable income limits, for example 30% of 90% AMI. The affordability restrictions would remain in
place for up to 15 years after the compliance period and, as with the LIHTC, the extended use period is a
minimum of 15 years for a total of 30 years of use restrictions; states could require a longer affordability
period beyond this 30-year minimum period, just as with the LIHTC. Should a property fail to meet the
income and rent restrictions, credits would be recaptured.
Just as the LIHTC has two types of LIHTC percentages, commonly referred to as 9% and 4% LIHTCs,
and formally known as the “70% present value credit” and the “30% present value credit,” respectively,
two types of MIHTC would be created. The MIHTC is designed to work with the LIHTC, as long as the
DASH Act: Comprehensive Housing Legislation Would Finance the 15
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable Homestwo credit types do not assist the same unit and provided taxpayers make an irrevocable election on a
building-by-building basis to use one credit or the other. The 5% MIHTC–50% present value credit over
15 years–can be used with the 9% LIHTC. For example, a 100-unit property could have 40 units assisted
by 9% LIHTC and 60 units assisted by 5% MIHTC. The 2% MIHTC–20% present value over 15 years–
must be used with PAB financing plus the 4% LIHTC. For example, a 100-unit property financed by
PABs-with MIHTC assistance, must have at least 60 units assisted by 2% MIHTC and 40 units assisted
by 4% LIHTC.
See below for projected 5% allocations 2021-30:
Projected 5% MIHTC Allocation from 2021 to 2030
$1.30
$1.20 $1.25
$1.15
$8b
$1.10 $7.0b
$7b
$1.05
$6b
$5.3b
$5b
$4b
$3b
$2b
$1b
$0
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Source: Novogradac
With limited resources available for affordable housing production and rehabilitation, the MIHTC would
be a much-needed tool for states to address “missing middle” housing needs. To preserve states’ ability
to finance affordable housing tailored to their needs, a provision of the DASH Act states any unused 5%
MIHTC allocations after one year could be added to LIHTC state ceiling, ensuring that valuable housing
resources are not lost if there are not enough qualified and suitable applications submitted for MIHTC
DASH Act: Comprehensive Housing Legislation Would Finance the 16
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable Homesauthority. While the target for the MIHTC are those households that earn slightly above the income
eligibility requirements for LIHTC homes, the framers of the bill acknowledge the responsibility to
prioritize the needs of low-income renters when possible.
Over 10 Years 344,000 Affordable Rental Homes Could be Financed
Novogradac estimates that 216,100 additional affordable rental homes could be financed over 10 years
through the use of the 5% MIHTC. Because of the uncertainty about the extent to which states would
allocate multifamily private activity bonds for properties with 2% MIHTC, Novogradac provides a range
of estimates, based on states allocating 5% to 15% of their PAB allocation. The 2% MIHTC could finance
an additional 43,000 to 127,900 affordable rental units over 10 years given that range. Using research
conducted by the National Association of Home Builders, Novogradac estimates those 344,000 homes
could house more than 800,000 people in the targeted income range. It should be noted that people may
currently be occupying rental homes that are actually affordable to low-income renters, so through the
financing of these affordable homes, the DASH Act would also help low-income households who are cost
burdened or cannot find affordable housing by freeing that portion of limited affordable rental housing
stock.
Proposed Increase in Affordable Rental Homes Financed and Overall
Economic Impact Due to DASH Act Provisions Over 10 Years
DASH/MIHTC Rental Homes Economic Impact
Total Rental Wages &
2% Units 5% Units Jobs Taxes
Homes Business Income
127,900* 216,100 344,100 560,400 $63,473,156,600 $22,030,191,800
*Estimate assumes at least 15% of multifamily private activity bond issuance includes MIHTC assistance.
Source: Novogradac
Novogradac estimates these states would gain the largest number of affordable rental homes:
DASH Act: Comprehensive Housing Legislation Would Finance the 17
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable HomesStates Seeing the Largest Increase in Affordable Rental Homes
Due to DASH Act MIHTC Provisions
Additional Homes
Over 10 Years
1 California 46,800
2 Texas 26,800
3 Florida 23,700
4 New York 19,600
5 Georgia 16,900
6 Illinois 13,200
7 Pennsylvania 11,400
8 Virginia 10,200
9 Michigan 10,100
10 Ohio 9,800
11 Washington 9,200
12 Tennessee 9,100
13 Maryland 8,700
14 North Carolina 8,700
15 Massachusetts 7,800
16 New Jersey 7,400
17 Indiana 6,800
18 Arizona 6,600
19 Colorado 6,300
20 Wisconsin 6,000
Source: Novogradac
The following table contains Novogradac’s estimates of affordable rental homes, jobs and economic
impact over 10 years by state:
Wages &
State Rental Homes Jobs Taxes
Business Income
Alabama 3,200 5,200 $590,362,300 $204,902,300
Alaska 700 1,100 $129,141,800 $44,822,400
Arizona 6,600 10,700 $1,217,622,300 $422,611,000
Arkansas 2,500 4,100 $461,220,600 $160,079,900
California 46,800 76,200 $8,634,049,100 $2,996,696,100
Colorado 6,300 10,300 $1,162,275,800 $403,401,400
Connecticut 4,600 7,500 $848,645,900 $294,547,000
Delaware 1,300 2,100 $239,834,700 $83,241,600
District of Columbia 3,300 5,400 $608,811,200 $211,305,500
Florida 23,700 38,600 $4,372,371,000 $1,517,557,600
Georgia 16,900 27,500 $3,117,851,100 $1,082,140,200
DASH Act: Comprehensive Housing Legislation Would Finance the 18
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable HomesWages &
State Rental Homes Jobs Taxes
Business Income
Hawaii 1,800 2,900 $332,078,800 $115,257,500
Idaho 1,400 2,300 $258,283,500 $89,644,800
Illinois 13,200 21,500 $2,435,244,600 $845,222,000
Indiana 6,800 11,100 $1,254,520,000 $435,417,400
Iowa 2,900 4,700 $535,015,900 $185,692,700
Kansas 2,000 3,300 $368,976,500 $128,063,900
Kentucky 4,700 7,700 $867,094,700 $300,950,200
Louisiana 4,900 8,000 $903,992,300 $313,756,600
Maine 800 1,300 $147,590,600 $51,225,600
Maryland 8,700 14,200 $1,605,047,600 $557,078,100
Massachusetts 7,800 12,700 $1,439,008,200 $499,449,300
Michigan 10,100 16,500 $1,863,331,100 $646,722,900
Minnesota 5,500 9,000 $1,014,685,300 $352,175,800
Mississippi 1,900 3,100 $350,527,600 $121,660,700
Missouri 3,800 6,200 $701,055,300 $243,321,500
Montana 1,000 1,600 $184,488,200 $64,032,000
Nebraska 1,300 2,100 $239,834,700 $83,241,600
Nevada 3,300 5,400 $608,811,200 $211,305,500
New Hampshire 900 1,500 $166,039,400 $57,628,800
New Jersey 7,400 12,100 $1,365,212,900 $473,836,600
New Mexico 2,200 3,600 $405,874,100 $140,870,300
New York 19,600 31,900 $3,615,969,300 $1,255,026,600
North Carolina 8,700 14,200 $1,605,047,600 $557,078,100
North Dakota 800 1,300 $147,590,600 $51,225,600
Ohio 9,800 16,000 $1,807,984,600 $627,513,300
Oklahoma 3,800 6,200 $701,055,300 $243,321,500
Oregon 3,900 6,400 $719,504,100 $249,724,700
Pennsylvania 11,400 18,600 $2,103,165,800 $729,964,400
Rhode Island 1,300 2,100 $239,834,700 $83,241,600
South Carolina 3,800 6,200 $701,055,300 $243,321,500
South Dakota 800 1,300 $147,590,600 $51,225,600
Tennessee 9,100 14,800 $1,678,842,900 $582,690,900
Texas 26,800 43,700 $4,944,284,500 $1,716,056,700
Utah 4,600 7,500 $848,645,900 $294,547,000
DASH Act: Comprehensive Housing Legislation Would Finance the 19
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable HomesWages &
State Rental Homes Jobs Taxes
Business Income
Vermont 900 1,500 $166,039,400 $57,628,800
Virginia 10,200 16,600 $1,881,779,900 $653,126,100
Washington 9,200 15,000 $1,697,291,700 $589,094,100
West Virginia 1,200 2,000 $221,385,900 $76,838,400
Wisconsin 6,000 9,800 $1,106,929,400 $384,191,800
Wyoming 500 800 $92,244,100 $32,016,000
Guam 600 1,000 $110,692,900 $38,419,200
Northern Marianas 1,900 3,100 $350,527,600 $121,660,700
Puerto Rico 700 1,100 $129,141,800 $44,822,400
Virgin Islands 500 800 $92,244,100 $32,016,000
Homeownership: Neighborhood Homes Tax Credit
and First-time Homebuyer Tax Credit
Realizing that not only do American renters need assistance but so too do many first-time homeowners,
especially those in distressed areas, the NHTC would be used in those communities where the cost of
new construction or acquisition and substantial renovation of owner-occupied homes is more than the
market value of the property, thus helping to bridge the financing gap.
Legislative History
The NHTC is just the latest attempt to improve homeownership rates through the tax code. George W.
Bush included a Single-family Homeownership Tax Credit in his 2004-2005 annual budget requests
that would provide builders of affordable homes for middle-income purchasers with a tax credit awarded
by state housing agencies. At the time, it was estimated an additional 50,000 homes would be created
annually. In both the 108th and 109th Congresses (2003-2006), then Reps. Rob Portman, R-Ohio; Ben
Cardin, D-Maryland; and Tom Reynolds, R-New York, introduced the Renewing the Dream Tax Credit
Act, which would have established a homeownership tax credit to developers and investors constructing
a new home or rehabilitating an existing property. These bills–H.R. 839 and S. 875 in the 108th, and H.R.
1549 in the 109th–all enjoyed wide bipartisan support, with as many as 300 sponsors for the House bills
and 46 sponsors in the Senate.
More recently, NHIA sponsors have introduced the bill in consecutive sessions of Congress, attracting
bipartisan support to create this needed homeownership financing tool for distressed communities.
During the 116th Congress, NHIA was introduced in the House as H.R. 3316 by Reps. Bryan Higgins,
D-New York, and Mike Kelly, R-Pennsylvania; there were 31 cosponsors for that bill. In the Senate, S.
DASH Act: Comprehensive Housing Legislation Would Finance the 20
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable Homes4073 was introduced by Sens. Benjamin Cardin, D-Maryland; Rob Portman, R-Ohio; Christopher Coons,
D-Delaware; Todd Young, R-Indiana; Sherrod Brown, D-Ohio, and Tim Scott, R-South Carolina. The
NHTC was part of the Moving Forward Act, H.R. 2 (116th), the $1.5 trillion infrastructure bill passed
by the House July 2020. The NHIA was reintroduced this year in the Senate as S. 98 by the same six
senators as in the 116th Congress (there are 10 cosponsors thus far), and in the House as H.R. 2143 by Rep.
Higgins. Since being introduced March 23, H.R. 2143 has added 51 cosponsors. In addition to introduced
legislation, it should also be noted the NHTC was included in then-candidate Joe Biden’s Build Back
Better campaign platform and, once elected president, in the Treasury fiscal year 2022 Greenbook, where
details are provided of the administration’s annual tax proposals.
About the NHTC
The NHTC would create a new state-administered tax credit to developers of affordable owner-occupied
homes. States, including the District of Colombia and U.S. possessions, would receive an allocation of
tax credits from the U.S. Department of the Treasury in the amount of the greater of $6 per capita or $8
million, indexed to inflation after 2022. The nationwide total is estimated to be slightly more than $2
billion annually.
Projected NHTC Allocation from 2022 to 2031
$7.06
$7.21
$6.78
$6.51
$3b
$6.00 $6.25 $2.6b
$2.5b
$2.1b
$2b
$1.5b
$1b
$0.5b
$0
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Source: Novogradac
DASH Act: Comprehensive Housing Legislation Would Finance the 21
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable HomesState housing agencies would administer the NHTC, just as they do with the LIHTC, providing
developers with tax credits to build or substantially rehabilitate residences in qualifying census tracts.
Another similarity to the LIHTC would have state housing agencies develop a qualified allocation plan
(QAP) that details the criteria by which state agencies will allocate the NHTC. There will be annual
reporting, detailing homes created and other key reporting requirements, and state agencies will also be
required to track noncompliance based on guidelines they draft.
Specifics of the incentive laid out by the bill include:
• Allocations. Sponsors would be provided tax credits that are worth up to 35% of the qualified
development cost (with some adjustments) or 80% of the national median sale price for a new home,
whichever is less, with allocatees receiving no more credits than what is necessary to make the
property financially feasible.
• Qualified development costs and timeline. Allowable costs and fees would include: those
relating to construction, substantial rehabilitation, demolition or environmental remediation; the
adjusted basis of buildings and land, determined at acquisition, in the case of an affordable sale.
• Development period–retention of allocated credits. A developer would not be able to claim
the tax credit until a qualified residence or project is sold. Failure to complete a qualified residence
or project within five years would result in the developer having to repay the allocated credits to the
housing agency.
• Qualified census tracts. Only those projects located in qualifying census tracts–lower median
incomes, higher poverty rates and home values at or below area medians–would be eligible for
tax credits. In order to qualify, census tracts must satisfy one or more of the following sets of
characteristics:
• Distressed areas. Qualified census tracts would have to have a median gross income under 80%
of the area median, a poverty rate not less than 130% of the area poverty rate, and a median value
for owner-occupied housing under the area median value;
• Metropolitan areas. Qualifying census tracts would be located in a city with at least 50,000
people, a poverty rate of at least 150% of the area poverty rate, a median income under the area
median, and a median home value under 80% of the area median value; or
• Nonmetropolitan and disaster areas. The census tract would be located in a nonmetropolitan
county, have a median income below the area median and have been designated by the state NHIA
credit agency under this clause. States could allocate 20% of tax credits to qualifying residence/
projects in nonmetropolitan census tracts or rehabilitating affected residences in census tracts that
had been declared disaster areas by the president in the past three years.
• Eligible home types. Home types that would qualify for the tax credit would be: single-family
homes with 1-4 units; condominium units and cooperative housing. Eligible development types would
DASH Act: Comprehensive Housing Legislation Would Finance the 22
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable Homesinclude: new construction for sale; substantial rehab for sale; and, substantial rehab for existing
homeowners.
• Qualified homeowner. Only those individuals who:
• Own or reside in a qualified residence as a principal residence; and,
• Whose income is 140% or less of the area median.
• Stipulations would be placed upon resale or conversion of a home: Homeowners would have to pay
a “significant portion” of their gains to the state housing agency if they resell their homes within
five years; those who convert their homes to rentals would forfeit tax deductions for their rental-
related expenses.
NHTC Would Help to Address Homeownership Gap, Improve Distressed
Neighborhoods
Homeownership has long been considered a gauge used to measure the economic prosperity of the
country as well as a standard for individual wealth building. Currently, 65.6% of households live
in owner-occupied housing as of the first quarter of 2021, a 0.3% increase over the same point last
year. Though the homeownership rate has been steadily increasing over the years, certain households,
particularly minority and low- and moderate-income households, continue to face difficulties achieving
the goal of homeownership. A considerable gap still exists in the homeownership rates of white and
BIPOC households–the Black-white homeownership gap and the Hispanic-white gap was 28.1 percentage
points and 23.8 percentage points, respectively, in the first quarter of 2021. While both figures represent
a modest improvement from historically large gaps, the current rise in home prices, tight supply and
income and wealth gaps between households of color and their white counterparts mean additional
measures, such as the NHTC, will be needed to close the homeownership gap.
Research shows that addressing the homeownership gap could lead to access to more affordable housing.
A May 2021 research brief from the Urban Institute, “Homeownership is Affordable Housing” posits
that homeownership provides the “affordability and stability low-income families need” and measures
that increase access to homeownership will provide “long-term solutions to the nation’s affordability
crisis.” Controlling for income, the author states that among households with annual incomes less than
$50,000, on average, renters spend 34% of their income on housing compared to owners who only spend
24%. Similar outcomes are seen among homeowners of color compared to various categories of renters.
Among low-income households, those earning less than $50,000, 49% of homeowners are cost-burdened,
compared to 75% of renters.
In addition to the benefits of homeownership realized by households, the NHTC, with its targeting of
certain census tracts, will improve distressed communities. The NHTC is designed to address the gap
between the value of an owner-occupied unit and the construction/rehabilitation costs in distressed
DASH Act: Comprehensive Housing Legislation Would Finance the 23
www.novoco.com Creation and Rehabilitation of Nearly 2 Million Affordable Homesareas. Without intervention, such as the NHIA tax credit, development would be infeasible as this gap
would require these homes to be sold at a loss. The NHTC would cover approximately 24% of census
tracts nationwide, including 25% of non-metro tracts. The NHTC would rehabilitate owner-occupied
homes improving blighted and vacant housing, thereby improving these distressed areas, increasing
property values of other homes in the area, while also increasing the supply of affordable owner-occupied
homes.
When tools aim to direct investment to distressed areas, some policymakers raise concerns that
gentrification may follow, in time forcing out the very people the incentive was designed to assist. The
NHTC is designed to protect the existing community residents through the caps applied: homebuyer and
owner income would be limited to 140% of AMI; the purchase price of homes could not exceed four times
AMI; and, the eligible basis for tax credits would be limited to 80% of the national median new home
price.
NHTC Could Finance Construction, Rehabilitation of Half a Million Owner-
Occupied Homes
Through capital raised by the NHTC, an estimated 500,000 owner-occupied homes could be built
or rehabilitated over 10 years in distressed urban, suburban and rural neighborhoods, according to
the Neighborhood Homes Coalition. Along with the reduction of blight and vacant properties, the
Neighborhood Homes Coalition foresees the NHTC:
• providing $100 billion in total development activity;
• creating nearly 786,000 jobs in construction and related industries;
• resulting $42.9 billion in wages and salaries; and
• generating $29.3 billion in federal, state and local tax revenues and fees.
The NHTC would go a long way in assisting moderate-income households attain the dream of
homeownership and build assets while improving distressed communities across the country.
In addition to creating much-needed affordable owner-occupied housing itself, increased production of
owner-occupied homes would have significant economic impacts, as follows.
DASH Act: Comprehensive Housing Legislation Would Finance the 24
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