Bankers Join in Bid to Rescue Credits for Low-Income Housing
Seiberg, Jaret, American Banker
A coalition of lawmakers, bankers, and activists plans to launch a campaign today to save the tax credit for low-income housing.
The tax breaks, which provide banks with profits as well as assistance in meeting Community Reinvestment Act objectives, have been targeted by key Republicans in the effort to balance the budget.
But House and Senate banking committee leaders plan to announce their support this morning for the tax credit, which has helped finance 750,000 units of affordable housing since 1986.
"The tax credit does everything that we Republicans say we want to do with housing," said Rep. Rick Lazio, chairman of the House Banking Committee's housing subcommittee. "It puts private capital at risk. It leverages public dollars. It ensures income mix."
The New York Republican said in an interview Friday that supporters must rally for the program now, before Congress passes a budget that doesn't fund it.
BankAmerica Corp. and NationsBank Corp. will be among the industry's representatives at the rally today. Others expected to attend include Senate Banking Committee Chairman Alfonse M. D'Amato and Sen. John H. Chafee, R-R.I.
House Ways and Means Committee Chairman Bill Archer has eliminated the program's funding in the last several budget bills, including the one Republicans are expected to release this week. He has said the program is inefficient, citing an Internal Revenue Service audit that found it isn't serving low-income communities. He also has charged that the tax break's $3.3 billion price tag for the next seven years is too high.
Rep. Archer could not be reached for comment and his staff declined to comment.
Today's announcement is part of a three-month campaign by the Enterprise Foundation and the Local Initiatives Support Corp. to counter Rep. Archer's attack.
The groups claim the IRS withdrew its report after the agency's inspector general concluded that serious flaws produced inaccurate results. Also, they said the program is much less expensive than other federal housing efforts.
The possibility of losing the program has irked community activists, who see tax credits as the best way to provide affordable housing. "This just reveals the absolute lack of commitment by this Congress to housing the poor," said John Taylor, president of the National Community Reinvestment Coalition. "There is just no excuse for attacking this program."
In addition to BankAmerica and NationsBank, the activists have recruited dozens of banks to support their cause, including First Chicago Corp., Chemical Bank, and Wachovia Corp.
"We believe people should have safe, clean, and affordable housing," said Donald Mullane, executive vice president at Bank of America. …