How President Trump’s Tax Cuts Will Affect Low Income Housing in a Really Bad Wayby GDN Shared Post March 21, 2017
The National Low Income Housing Coalition reports that there is now a shortage of affordable homes in every state and major metropolitan area in the country. It is considered a national housing crisis. Yet President Donald Trump has proposed tax cuts that will send a sharp blow to low income housing financing. This could mean that low income housing projects may be either delayed, or killed.
Less funding for low income housing projects
Here’s the way it works: The Low-Income Housing Tax Credit (LIHTC) is the most important resource for creating affordable housing in the United States today. It was created under the Tax Reform Act of 1986 and gives incentives for the development of affordable housing aimed at low-income Americans.
The incentives are in the form of tax credits that come from the federal government, who gives them to state housing agencies, which then distribute them to affordable housing developers.
Tax cuts will mean less funding for low income housing projects from the federal government. Unless state housing agencies have other funding, which is unlikely, affordable housing developers may not receive enough funding to build low income housing.
Poor families will struggle more
In addition, the Trump administration plans to cut more than $6 billion from the Department of Housing and Urban Development, eliminate the Community Development Block Grant Program and the Federal Historic Tax Credit program, according to Gilbert J. Winn, chief executive of Boston-based developer WinnCompanies.
Cities across the country are already struggling to supply enough affordable housing to help low income families. The federal tax cuts will make the situation worse. How much worse remains to be seen!