Tax reform bill released for markup
Today, Republicans released the Tax Cuts and Jobs Act (H.R. 1). You can read a summary of each section as well as the policy highlights released by the committee. Overall the plan would lower the individual tax rates and doubles the standard deduction for individuals, and lowers the corporate tax rate to 20%. The plan also repeals the State and Local tax deductions, but allows individuals to continue to claim an itemized deduction for real property taxes up to $10,000.
Some key highlights for housing advocates:
- The Low Income Housing Tax Credit is preserved, but the bill does not include language from HR1661/S548 modernizing the program;
- The bill caps the Mortgage Interest deduction at $500K (down from $1 million) and only on the taxpayer’s primary residence. This is part of a reform of deductions that the Joint Committee on Taxation (JCT) estimates would increase revenues by more than $1.2 trillion;
- The New Markets Tax Credit is terminated;
- The Rehabilitation Credit is repealed;
- Private Activity Bonds are terminated; and
- Modifies the charitable deduction by increasing the cash contribution limitation to 60% if a taxpayer’s Adjusted Gross Income from 50%.
While the preservation of the Low Income Housing Tax Credit is crucial for affordable housing across the country, the drop in the corporate tax rate could have a negative effect on credit pricing.
The proposed loss of the New Markets and Historic Rehabilitation credits as well as private activity bonds are a significant to affordable housing and community and economic development.
The Coalition does support the modifications to the Mortgage Interest Deduction (MID). Half of all homeowners do not benefit from the MID, and nearly all of MID dollars go to households with incomes over $100,000. Unfortunately, the revenue generated by these reforms is not reinvested in housing for those who need it most. For more information, visit the United For Homes campaign.
Stay tuned for further analysis as we continue to better understand the broader impact of this tax reform proposal.
Supreme Court upholds developer fees
On Monday, the Supreme Court refused to take up a case from West Hollywood, CA challenging a California requirement that developers subsidize affordable housing through developer fees. The California courts have said these fees are not an “exaction” or a taking of property, but rather a reasonable regulation of development. For more, click here.
Raleigh rehab bids
The City of Raleigh Community Development Department Housing Rehab Program is advertising whole building rehabilitation of 3012 Olde Birch Drive and 1204 Bunche Drive. The pre-bid walk-through for Olde Birch Drive will be held on Nov. 13 at 10 a.m. and the pre-bid walk through for Bunche Drive will be held on Nov. 13 at 11 a.m. Final bids for both projects will be due on Nov. 20 at 4 p.m.
NC Affordable Housing Conference featured sessions for local governments
At the 2017 Housing Works conference, the agenda featured three unique presentations that could have larger impact on local governments across the state. To see the presentations, click on the links of the presenters.
The first session focused on a few innovative strategies being leveraged across the state and how these methods could be replicated in other areas to improve affordable housing options. Panelist included Aspen Romeyn, AICP, senior planner, Regional Planning, Triangle J Council of Government, Durham; and Heather Dillashaw, community development director, City of Asheville.
The second session focused on how to use mapping and data to target affordable housing solutions for your community. Panelist included Michael Webb, senior research associate & project director, Center for Urban and Regional Studies, UNC-Chapel Hill; Hugh Devine, professor emeritus in geospatial analytics, North Carolina State University, Raleigh; and Stephen Sills, director, Center for Housing and Community Studies, UNC-Greensboro
The last session focused on how for-profit and nonprofit producers and advocates of affordable homeownership leverage different strategies to impact local communities. Panelist included Rush Otis, Director of Southwood Redevelopment, Habitat for Humanity of Greater Charlottesville, VA; Bruce Savage, principal, Savage PR and Marketing, Washington D.C. and Selina Mack, executive director, Durham Community Land Trustees