The big tax cut bill cleared by the House Ways and Means Committee contains what is called the largest increase ever in resources for affordable housing.

In an effort to boost redevelopment activity, the legislation also would create broad tax credits for people who renovate homes, especially historic houses, in urban neighborhoods where private investment has been lagging.

But because these and other housing-related bennies are contained in a Republican- crafted $864 billion tax-cut that also covers such political hot potatoes as Medicare and Social Security, they may never become law.

For one thing, the Democrat-controlled Senate Finance Committee has a far more modest $300 billion tax-relief plan of its own on the table, so a compromise has to be reached. But more important, President Clinton is threatening to veto any measure that he finds too costly.

Perhaps that's why John McEvoy, executive director of the National Council of State Housing Agencies, says that "everyone who believes in decent, affordable housing for all Americans" -- read that as William Jefferson Clinton -- "should support this bill."

Certainly many members of Congress do, at least the provisions that would dramatically increase the states' capacity to issue federally tax-exempt bonds to finance affordable mortgages for lower income home buyers and provide federally tax-advantages tax credits to encourage investment in apartments for low income renters.

More than 75 percent of the entire House has already co-sponsored separate legislation to increase bond and low-income tax credit limits. That's at least 100 more members than backed more glamorous initiatives to end the so-called marriage tax penalty, reduce capital gains and reform the estate tax, all of which also are part of the Financial Freedom Act of 1999.

"The reason these two measures have amassed so many co-sponsors is the enormous need for them and the good will they will do," McEvoy said on the eve of the Ways and Means Committee action. "Congress froze these programs at 1986 prices and has never revised them, and the unintended result is that inflation has cut the value of the apartments and mortgages they can finance by half since then."

The panel's bill increases each state's annual limit on private activity bond authority, including housing bonds, from the greater of $50 per capita or $150 million to the greater of $75 per capital or $225 million, effective beginning in the year 2000.

The measure also increases each state's annual low-income housing tax credit ceiling of $1.25 per capita by a dime per year over each of the next five years, until it reaches $1.75 per capita in 2004. It also indexes the ceiling to inflation.

"Congress never has increased affordable production programs as much in a single piece of legislation, but the need has never been greater," McEvoy said.

The bill calls for other housing-related goodies as well. Under one proposal, taxpayers who purchase homes in historic districts, renovate them and use them as their primary residences would be allowed to claim 20 percent of their rehabilitation costs or 5 percent a year for 10 years, whichever is greater, as a tax credit.

Unlike write-offs, tax credits come right off your bottom line. So if you owe $5,000 in taxes and could claim $5,000 as a rehab credit, you'd pay Uncle Sam nothing. In addition, the measure authorizes the Department of Housing and Urban Development to designate up to 20 "renewal communities" for special tax incentives, including the creation of family development accounts that would enable low-income taxpayers to save a portion of their incomes and claim up to $2,000 in savings annually as tax-free contributions. In some renewal communities, moreover, HUD would be allowed to match family development savings.

Published: July 19, 1999

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.