During these tough economic times, when many more people need affordable housing, there is something Congress can do to increase the number of units available. By enacting a set of housing tax credit proposals, Congress can make a difference for many Americans, particularly those in upstate and Western New York.

The boost is needed because tax credit investors have been pulling back from low-income housing projects. The Low Income Housing Tax Credit program is the primary source for the development of affordable rental housing nationwide, but investor participation has been reduced significantly from its peak in 2006 because of a weak economy.

One good measure to change that would be to extend what is known as the Section 1602 Housing Credit exchange program, but modifying it to help states to continue funding —through exchanging housing credits arising from tax-exempt multifamily housing bonds—affordable rental housing while the investment market recovers.

Another would be to enact tax incentives to stimulate housing credit investment, in both the long and short terms. A carry-back proposal would stretch housing credits up to five years, for the 2008 to 2010 tax years, if there were reinvestment of the credit amounts into the new affordable rental housing. Tax credits generated by new housing financed by their use also should be eligible for carry-back up to five years, putting the program on more equal footing with other tax credit programs that have shorter compliance and holding periods. And the investor base could be expanded by allowing some types of corporations—“S” corporations, limited liability corporations and closely held “C”corporations— to use the house credit on the same basis as most other corporations, but only if they satisfy certain conditions including retaining $10 million in annual gross receipts.

Reduced demand for housing credits has lessened capital for affordable rental housing. According to advocates engaged in a grass-roots campaign, congressional inaction could mean that approximately 60,000 fewer apartments would be built or saved nationwide each year.

Millions of Americans hit by this recession still are engaged in a daily struggle just to stay above water financially. Many find themselves in need of affordable housing, and sometimes mental health treatment, in facilities built with the assistance of low-income tax credits.

Currently, what’s left of most housing credit investment is primarily concentrated in developments in major metropolitan areas where the Community Reinvestment Act (CRA) is the primary motivation for investor demand for the housing credit. But there’s still demand in rural areas for smaller affordable housing developments that don’t meet CRA requirements.

Without other help, up to 323 rental homes could be lost in New York’s rural areas annually and smaller developments of 60 homes or fewer would be less likely.

Low-income housing projects mean construction jobs for those out of work and affordable homes for those who need them. Congress could have an immediate impact on the lives of Americans by enacting these proposals.