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Strategy

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3 min read

Early in my career, when I worked as a sportswriter, Sonny Werblin, then the head of Madison Square Garden and thus the boss of the Knicks and Rangers, said to me, “A budget is a strategy.” Though the budget proposed by the President of the United States, usually each February, is just the beginning of a marathon conversation that frequently has no real ending, it does indicate the administration’s priorities. And from, among other things, the recommended elimination of the HOME program, the Housing Trust Fund, Choice Neighborhoods and CDBG, as well as a vast reduction in federal rental assistance from our president’s FY 2019 budget, we cannot help but deduce there is not enough concern for those who cannot currently afford the costs of their own housing.

What we do may not be their priority, but it remains ours, and so we have no choice but to find alternatives to the funding and support mechanisms that may be carelessly discarded. To support such an effort, for this issue of Tax Credit Advisor, we sent our accomplished team of journalists out to report on methods of funding affordable housing and community development, some new, others underutilized, that do not often appear in the sources and uses lists in our case studies.

The headline of a recent article by Oscar Abello on the Next City website blared that there was “A $27 Trillion Pot of Money to Tap for Affordable Housing.” That sure caught our attention. What the reporter was referring to is the amount of investment controlled by New York-based pension funds, which include affordable housing in their portfolios. So we asked staff writer Mark Fogarty to survey an array of pension funds around the country to assess their appetite and impact. (Pension Funds)

Social Impact Bonds, which are a commitment from the public sector to support efforts that both help the underserved and reduce government spending, are issued by organizations, such as Capital Impact and the Calvert Foundation and have supported some projects by NH&RA members. In this month’s The Guru Is In column, David A. Smith explains these funding mechanisms.

Few real estate markets are as expensive as New York. And yet a big city needs a large workforce. Solving the financial conflict between paying those who build enough to live on and providing affordable living quarters may seem as tricky as a three-card monte game on 9th Avenue. But Governor Andrew Cuomo and Mayor Bill Di Blasio have been aggressive in implementing social support programs including encouraging more affordable housing. Two years ago, they began to shape the Affordable New York program, which has resulted in both solutions and new problems, both of which Scott Beyer reports on. (Affordable New York)

And buried within the president’s new tax legislation is a program that, while currently lacking in details, may have the potential to support construction and preservation of affordable housing in specified areas of each state. A limited number of Opportunity Zones may be designated by governors and Opportunity Funds comprised of tax-deferred capital gains can be used to encourage development in these troubled neighborhoods.

Mark Olshaker reports on the current status of this new initiative. (Introducing Opportunity Zones)

We hope some of these funding alternatives are of value to you and relieve some of the frustration about those programs that are being threatened.

Marty Bell
Editor