If you’re paying attention to the presidential campaign, you’re seeing lots of news stories about polls, COVID-19, confirmation of a new Supreme Court justice, and the economy. You’re not seeing much about affordable housing, even though the next four years will be critical for affordable housing policy.
Over the next four years, no matter who is elected in November, the administration will need to make big decisions on tax credits, opportunity zones, fair housing, and collaborations with state and local government. These decisions will have broad implications on the housing industry and could go far in addressing the housing affordability crisis.
Opportunity Zones. In 2017, President Trump signed into law the Tax Cuts and Jobs Act, which helped create “opportunity zones,” tracts of land in distressed communities where investment would be encouraged through tax breaks on capital gains. He has pledged to expand this program, and Joe Biden has pledged to continue the program but “reform opportunity zones to ensure they serve black and brown communities, small businesses, and homeowners.”
Tax Credits. There is momentum in Congress for strengthening the Low-Income Housing Tax Credit (LIHTC) program, possibly as part of a new pandemic relief package. Specifically, members of the House of Representative asked for a 50% increase in low income housing tax credit annual allocations starting in 2021, a minimum rate of 4% for low-income housing tax credits and an additional basis boost for properties that were acutely burdened as a result the COVID-19 crisis. Some key changes could make a big difference in how many housing units are financed over the next decade.
Fair Housing. In 2015, a rule went into effect to reinforce a clause of the Fair Housing Act, which has been law since 1968, prohibiting discrimination in housing. The 2015 rule established a structured reporting process for reporting data to the Housing and Urban Development Agency, which at the time prevented cities receiving HUD funds from ignoring the portion of the Fair Housing Act that required them to make progress in ensuring that their programs address the issue of fairness in housing. The Trump Administration terminated the rule, and Biden has promised to re-implement it.
Funding Affordable Housing. Biden’s platform promises a major investment ($640 billion over 10 years) in affordable housing, funded by tax increases for corporations and large financial institutions. Trump has said he would like for the corporate tax rate to remain at the current level, and he has proposed no additional spending on affordable housing.
Our affordable housing team serves developers, builders, investors, and landlords, and we’re staying on top of possible policy changes that could be on the way. Led by Julie Lawrence, our team worked on an analysis of what’s at stake for affordable housing in the 2020 election, and it’s on GlobeSt.com, the nation’s top commercial real estate news website. To check it out, you’ll need to complete a free registration on GlobeSt.com.