Elimination of private-activity bonds would lead to steep drop in affordable housing units Affordable housing advocates were cautiously optimistic that the House tax reform bill would have only modest effects on low-income housing after the Trump administration?s framework explicitly retained the tax credit responsible for virtually all construction and preservation of low-income housing units?the Low-Income Housing Tax Credit (LIHTC).
While the House?s tax reform bill released Thursday does include LIHTCs, the unexpected elimination of private-activity bonds would have devastating effects on the construction and preservation of affordable housing. When combined with other changes the bill proposes, accounting firm Novogradac & Company estimates a loss of nearly 1 million affordable housing units produced over 10 years. ?This was the worst case scenario that we were bracing for,? said Rachel Fee, Executive Director of the New York Housing Conference. ?We knew bonds were slated for elimination in previous tax reform proposals so that threat has been out there,? she explained, ?However, given that the tax reform framework announced last month explicitly supported the housing credit, we were hopeful that there was sincere interest from the administration and House Republicans in supporting this public-private partnership model with a track record of success.?
The LIHTC program provides two types of credits for developers willing to put affordable housing units in th...