Tax Credits Can Boost Housing Affordability

Housing costs in many areas have continued to rise, making it increasingly difficult for many people to live near where they work, said Mike Szymanski, legislative aide to U.S. Sen. Hillary Rodham Clinton (D-N.Y.), during the NATIONAL ASSOCIATION OF REALTORS® Midyear Legislative Meetings & Trade Expo.
REALTOR® Magazine Online
Syzmanski talked to attendees about the benefits of expanding employer-assisted housing initiatives across the nation and the Housing America’s Workforce Act, which addresses the lack of affordable housing opportunities for private sector workers by promoting EAH programs. NAR supported a similar bill introduced into Congress in June 2005; however, the bill never became law.

Aiming for EAH Tax Relief

Since 2003, NAR has sought enactment of an income tax credit or similar tax incentive for developing entry level and affordable housing. NAR also supports an incentive for employers to provide a down payment assistance fringe benefit to their employees and to assure that employees will not be taxed on any cash or loan forgiveness benefit provided to them.

The bill was recently reintroduced by Clinton and U.S. Rep. Nydia Velazquez (D-N.Y.) in both chambers of Congress. The bill would provide tax relief to working individuals by allowing them to exclude funds from EAH programs from their taxable income. Current law requires employees to include any housing assistance they receive from an employer as taxable income.

The legislation would also encourage businesses to offer EAH programs to their workers by creating an employer tax credit for qualified programs. Finally, the bill would establish a grant program available to nonprofit housing organizations to provide technical assistance, program administration and education to support employers undertaking EAH programs.

“Developing successful EAH programs can help employers reduce turnover, which helps lower training and hiring costs, increase employee morale, support bottom line business goals, and enhance the economic stability of the local community,” NAR President Pat V. Combs said.

What You Can Do

To help create more affordable housing opportunities for workers through EAH programs, NAR’s Housing Opportunity Program launched “Home from Work” in 2006. The program provides training and tools to get more information on working with local businesses to develop EAH benefits for their employees.

The benefits can include homebuying workshops, one-on-one housing counseling offered by a REALTOR® or in partnership with a nonprofit homeownership counseling organization, or an EAH financial incentive. NAR also provides employers with a free technical assistance toolkit to help develop a customized EAH plan for their workers.