Why We Advocate

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3 min read

The passage of the American Taxpayer Relief Act (ATRA) in the final days of the 112th Congress was an important victory for affordable housing and new markets tax credit developers, professionals, and advocates around the country.

But the victory is a fleeting one. Much work lies ahead as the new Congress and President debate the debt limit, appropriations, and sequestration legislation in the near term before turning to comprehensive tax reform and housing finance reform later.

Still, I’d like to savor the victory, if only for a moment, and add some context to this legislation and the programs it supported that benefit our nation’s communities.

The low-income housing tax credit constructs or preserves upwards of 100,000 affordable apartments each year across in the nation – dispersed through every state. Had the minimum 9% credit rate reverted back to the lower floating-rate, many new future developments would have lost approximately 15% of their potential tax credit equity, causing funding gaps that would have been insurmountable in many communities. ATRA’s provision to extend the minimum 9% rate to projects receiving housing credit allocations before 2014 will allow developers to continue to provide a rich array of services and amenities to residents and achieve greater income targeting.

Though less well understood, the new markets tax credit has had an equally impressive track record. According to a recent report, during the period from 2003, when the first new markets tax credit investments were made, through 2010, $20 billion in NMTC capital leveraged $25 billion in additional capital that was invested in projects and businesses in low-income communities in all 50 states. This investment has created more than 500,000 jobs.

The program has had a dramatic impact on localities by funding a diverse array of economic ventures. Examples include:

• Charters schools in St. Louis, Mont.

• A full-service grocery store in Bozeman, Mont.

• Community theaters in Washington, D.C.

• The expansion of a manufacturing facility in Indianapolis, Ind.

• The adaptive-reuse of a vacant historic manufacturing plant into workforce housing and non-profit office space in Baltimore, Md.

• A state-of-the-art green recycling facility in Hamtramck, Mich.

• A seafood processing facility in Mobile, Ala. for an industry hard hit by Hurricane Katrina

• A unique sustainable mining enterprise in the Florida Everglades

These transformational projects are just the tip of the iceberg. The new markets tax credit, which ATRA renewed through 2013, has provided critical resources for hundreds of worthwhile enterprises across the U.S. that could not – and would not – have happened but for the program. Thanks to the passage of ATRA, the CDFI Fund will announce a new round of NMTC allocation awards this spring.

Thom Amdur is Associate Publisher of Tax Credit Advisor and Executive Director of National Housing & Rehabilitation Association