Low-Income Housing Tax Credits Lose Luster in the Post-GOP Tax Reform World

Fewer people investing in low-income housing tax credits means fewer affordable housing units being built—at a time when affordable units are in extremely short supply.

1 minute read

July 18, 2019, 5:00 AM PDT

By James Brasuell @CasualBrasuell


Construction

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When the Republican tax cuts of 2017 lowered the corporate tax rate from 35 to 21 percent, it also lowered the potential benefits of low-income housing tax credits.

According to an article by Kate Irby, those changes had a chilling effect on affordable housing development.

According to "independent data" cited by Irby, data show the GOP tax reform bill has delayed or killed 15,000 affordable housing units in California alone. Irby cites an expert for more detail:

Scott Hoekman, president and CEO of Enterprise Housing Credit Investments, LLC, a company that manages funds for the tax credits nationwide, estimated that meant companies were willing to invest about 10 to 15 percent less than they had before the 2016 election, cutting off a major source of funding and derailing thousands of projects.

Less investment means less construction:

In California, that meant about 10,000 delayed or killed housing units in 2017 and 5,500 in 2018, according to Matt Schwartz, president and CEO of the California Housing Partnership, and a 23 percent decrease in affordable housing production — from about 24,000 units in 2016 to less than 19,000 in 2018.

According to Irby, bipartisan legislation in Congress designed to increase the use of the Low-Income Housing Tax Credit has stalled.

Tuesday, July 16, 2019 in The Sacramento Bee

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