Tax Reform Threatens Affordable Housing Production

An editorial in the New York Times, “The Affordable Housing Crisis Is About to Get Worse,” highlights the significant threats to affordable housing production following enactment of last year’s major tax reform package. The Tax Cuts and Jobs Act reduced the top corporate tax rate from 35 to 21 percent, which has likewise reduced pricing for Low-Income Housing Tax Credits (Housing Credit). The Housing Credit is the country’s primary tool for developing new affordable housing; it has been responsible for financing three million affordable homes since 1986, providing housing to families, veterans, seniors and people with disabilities. The lower corporate tax rate, however, is estimated to reduce affordable housing production by 235,000 affordable homes over the next decade, according to Novogradac and Company – a devastating impact considering the vast and growing need for affordable housing nationwide. The Affordable Housing Credit Improvement Act (S. 548), bipartisan legislation in the Senate, would expand the Housing Credit by 50 percent, resulting in a sorely needed 400,000 additional affordable homes over the next decade. See the ACTION Campaign’s Advocacy Toolkit for resources to advocate for the Affordable Housing Credit Improvement Act.

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