The cryptocurrency would be backed by traditional municipal bonds Rising home prices and rents are creating an affordable housing crisis in America, and it?s been a rough few months for the effort to combat it.
First, Congress passed a tax bill in December that neuters the Low Income Housing Tax Credit (LIHTC) program, with one study suggesting it could lead to 235,000 fewer affordable housing units produced over the next 10 years.
Then, on Monday, the Trump administration released a budget proposal that eliminates the annual $4 billion in federal block grants that the Department of Housing and Urban Development (HUD) distributes to address affordable housing. It also guts public housing.
With federal support waning, cities are left to fend for themselves, and Berkeley, California, is exploring a radical idea to raise funds for affordable housing measures?cryptocurrency. The city, known for being a liberal hot bed and a global tech hub, announced that it?s exploring an ?initial coin offering? that would exchange a new cryptocurrency backed by municipal bonds for cash that would go toward affordable housing measures. Berkeley City Council member Ben Bartlett has been spearheading the effort along with mayor Jesse Arreguin. They?re partnering with UC-Berkeley?s Blockchain Lab and municipal finance startup Neighborly. The coin would essentially act as a blockchain tax-exempt municipal bond, with the potential for it to evolve into an exchange currency down the road.
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