Low Income Housing for Defense Communities Act
The Low Income Housing for Defense Communities Act would modify the tax code to make rental housing more affordable for members of the Armed Forces by expanding and tailoring tax incentives. Key changes include excluding military basic housing allowance (BHA) from income calculations used to determine eligibility for the Low-Income Housing Tax Credit (LIHTC) and for certain tax-exempt bond determinations, and creating a new mechanism to boost LIHTC incentives for buildings located near large military installations. Specifically, properties within 15 miles of a large installation could be treated as being in a “difficult development area,” potentially increasing the credit available for those projects. The act also codifies that these near-base projects need not be occupied exclusively by armed forces members. The measure also includes a sense of Congress supporting broader expansion of affordable housing credits.
Key Points
- 1Excludes military basic housing allowance (BHA) from income when determining LIHTC eligibility (Section 42(i) addition: new paragraph (10)).
- 2Excludes BHA from income in determining eligibility for tax-exempt bonds for qualified residential rental projects (Section 142(d)(2)(B)); simplifies related deadwood provisions.
- 3Applies the BHA income exclusion to determinations made after enactment (effective date for income determinations).
- 4Expands LIHTC benefits for buildings near large military installations by treating such buildings as located in a difficult development area (Section 42(d)(5)(B)(vi)).
- 5- Large installation defined by a replacement value threshold of over $2.833 billion (as determined by the Secretary of Defense).
- 6Buildings near installations must be placed in service after enactment to receive the DAC treatment; no requirement that units be occupied solely by service members.
- 7Short title is the “Low Income Housing for Defense Communities Act,” and the bill includes a sense of Congress encouraging further expansion of affordable housing credits (referencing the Affordable Housing Credit Improvement Act of 2023).