R
epresentative Ritchie Torres has introduced a bill that would exempt 100% affordable housing projects from the federal volume cap on private activity bonds. This limit, which is set annually by the government, restricts states' ability to issue these critical bonds used in tandem with low-income housing tax credits to finance affordable housing. The Democrat claims this change would be a "game changer" for housing production and help address the affordability crisis in America.

    Torres' Accelerated Supply of Affordable Production Housing Act (ASAP) would spare projects with units for households earning up to 80% of the area median income from the volume cap until 2034. This move could potentially double New York's annual affordable housing production, according to Rachel Fee, executive director of the New York Housing Conference.

    The bill aims to address a long-standing issue in affordable housing finance. Currently, at least half of a project must be financed through private activity bonds to qualify for 4% low-income tax credits, a rule known as the 50% test. Efforts to lower this threshold have stalled out in the past. The ASAP bill would make an even bigger dent in housing needs across the country than previously proposed changes.

    Demand for these tools is not limited to New York. As of September, 20 states were over their volume cap, according to an analysis by Novogradac and Tiber Hudson. Issuing more bonds than allowed can jeopardize their tax-exempt status. City officials have repeatedly cited the need for more help from the federal government in ramping up housing production.

    The bill's fate is uncertain given the upcoming election, but Torres remains hopeful that now is an ideal moment to address this issue. Housing has become a central concern of the presidential election, and Congress will tackle expiring tax laws next year. State and city officials will join Torres at a rally on Thursday to promote the bill.