Bill will make affordable housing construction more difficult in the midst of a supply crunch, report says
The tax overhaul that just passed the House of Representatives and is likely to be signed into law will reduce the supply of affordable housing by 235,000 units over the next 10 years, according to an industry analysis.
Michael Novogradac, whose accounting firm tracks affordable-housing incentives, released an analysis Tuesday of what’s likely to be the final legislation.
The bill preserves the low-income housing tax credit as well as the private activity bonds that help enable construction — but because it lowers the corporate tax rate, it makes tax credits less valuable.
It also changes the way future inflation is calculated, thereby decreasing inflation adjustments in later years.
Novogradac notes that the loss of nearly a quarter-million affordable housing units could also mean the loss of jobs for construction, as well as lost local revenues.
“The final bill would still appreciably reduce affordable rental housing production at a time when the need for affordable rental housing is acute,” Novogradac said.