Important Federal Development Financing Tools Threatened By Tax 'Reforms'

Urban activists in Milwaukee and elsewhere - - it's time to get on the phone to your Members of Congress about saving two endangered federal tax credits:

...one that currently supports 90 percent of affordable housing development nationwide, and another that is spurring investments in businesses, real estate projects and facilities like health clinics, charter schools and child care centers, all in low-income communities.... 

Congress is working on an overhaul of the tax code that seeks to eliminate deductions and credits, including these tried-and-true programs.., 

Passed by Congress in 1986 and signed into law by President Ronald Reagan, the low-income housing tax credit gives the private sector an incentive to create and invest in affordable housing....[and has] financed the development of about 2.6 million affordable rental homes across the country, leveraging more than $100 billion in private capital to do so. 

These properties outperform other real-estate categories, with occupancy rates topping 96 percent and a cumulative foreclosure rate of less than 1 percent over the program’s history. 

The new-markets tax credit, created in 2000, was born of the same principles that gave rise to the housing credit... 

As of 2011, the new-markets credits had financed 3,500 businesses and real estate projects in low-income neighborhoods, developed or rehabilitated more than 109 million square feet of commercial real estate and community facilities, and helped to create or preserve more than 360,000 jobs.

Last year alone, the housing and new-markets credits together attracted some $14 billion in direct investment in capital-starved communities, supporting an estimated 160,000 jobs.These credits serve populations that are the hardest to reach and are the most distressed.