San Diego Affordable Housing Production Threatened by Changes in Tax Law

Because the Tax Cuts and Jobs Act has lowered the top corporate tax rate from 35 to 21 percent, prices for the Low-Income Housing Tax Credit (Housing Credit) have fallen. In San Diego, the lower prices for Housing Credits will cut production of affordable homes: according to Sue Reynolds, President & CEO of Community Housing Works, and Matt Schwartz, President & CEO of California Housing Partnership, San Diego may build or preserve 5,000 fewer affordable homes over the next 10 years because of the reduced value of the Housing Credit. Reynolds and Schwartz note that the Housing Credit has created more than 23,000 affordable rental homes and 14,000 jobs in San Diego County, but that impact will be decreased because of changes from the tax law. They urge lawmakers to pass the Affordable Housing Credit Improvement Act, bipartisan legislation in the Senate that would expand the Housing Credit by 50 percent, noting that strengthening the Housing Credit is critically important to addressing San Diego’s homelessness and affordability challenges.

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