Download
HTML Embed
HTML EMBED
Click to Copy

Latest Episodes

Download
HTML Embed
HTML EMBED
Click to Copy
Download
HTML Embed
HTML EMBED
Click to Copy
This Is Uncomfortable
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Download
HTML Embed
HTML EMBED
Click to Copy
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report

Proposed tax credit change could reduce future affordable housing

Erika Beras Dec 7, 2017
Share Now on:
A construction site stands around neglected housing in Manhattan on November 30, 2017 in New York City. Republicans are coming closer to getting the votes needed to pass their proposed tax cut which many economists predict will benefit the wealthy at the expense of the poor and middle class.
Spencer Platt/Getty Images

Affordable housing advocates say that a provision in the House version of the tax bill would remove an incentive for developers to invest in affordable housing.

Tax-exempt private activity bonds are often used when affordable housing is built, along with the low-income housing tax credit, which provides a 4 percent tax credit. While the LIHTC is retained in the House version of the tax bill, private activity bonds are eliminated. In order for developers to get the 4 percent tax credit under the LIHTC program, they must fund 50 percent or more of their project using private activity bonds. 

“Without this program the crisis would be much worse especially for the low-income people,” said Diane Yentel with the National Low Income Housing Coalition. She adds that losing the tax-exempt status of these bonds would greatly affect future affordable housing developments.

“Without the incentive from the federal government, those affordable homes don’t get built,” she said.

Kevin Acklin works for the mayor’s office in Pittsburgh. He says the city relies on these bonds to finance infrastructure and housing. With the House proposal in play, local leaders are trying to lock in financing now.

“So there has been a bit of a rush. We’ve seen some discounting on the secondary market trading for housing credits because of the thought that they may be eliminated,” he said.

The National Low Income Housing Coalition estimates that the change could mean that at least 800,000 affordable units won’t be built over the next decade. Congress still needs to work out details of a final tax plan.

If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air.  But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.

Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.

When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.