Press Releases

Congresswoman Suzan DelBene (WA-01) sent a letter to the U.S. Department of the Treasury and the Internal Revenue Service (IRS) requesting swift finalization of the average income test rule under the Low-Income Housing Tax Credit (LIHTC) program. The lawmakers are urging Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig to ensure that the final rule is user-friendly to support the expansion of affordable housing. 

The U.S. had a shortage of nearly 4 million homes in 2020. The LIHTC program, which accounts for more than 90% of new affordable rental units built today, is the most important federal tool for boosting America’s affordable housing supply. Congress broadened the LIHTC program in 2018 by creating the “average income test,” enabling LIHTC properties to serve households with a wider variety of incomes under certain conditions. However, since the IRS released its proposal to implement the new test in October 2020, the test has rarely been used.  

“While the average income test is intended to expand affordable housing to more families, stakeholders from across the affordable housing community have raised concerns that implementing IRS’s proposed regulations will be highly complex and risky compared to the LIHTC program’s existing set-aside tests,” wrote the lawmakers. “In fact, since the publication of the proposed rule, few investors have been willing to invest in average income test properties due to the risk associated with that structure, contradicting congressional intent to broaden the program in this manner.” 

“We are pleased by President Biden’s May 16, 2022 announcement that IRS will finalize the income averaging rule no later than September 30, 2022. Given the urgency and severity of our nation’s affordable housing crisis, we respectfully ask you to meet or exceed this deadline while ensuring the final rule provides a workable solution that incents affordable housing production.” 

The full letter can be read here.