Gee—the Left can always create a problem as to why we need to raise taxes, keep taxes high and steal more from the productive people of our society. In this case, they are claiming that if YOU have more money in your pocket, affordable housing will not be built.
“However, the Trump Administration’s next big drive in Congress will be tax reform. Aware of that, investors are thinking that the tax changes may result in their corporate income taxes dropping, making the 9 percent deduction look less appealing, said Steiner.
Currently, no developers are knocking on the door at the Housing Authority to start a project. If this continues, it looks like the Housing Authority may have to dip into the $580 million bond, approved by voters last year, in order to make up the financing gap, said Steiner. The Housing Authority has been hoping to save the money for other projects, instead of having to provide a stimulus to overcome current investor reluctance, she said.”
Guess this people do not get it. Why is no one knocking on their door? Because affordable housing is a money loser—how many developers want to go into a project knowing they will lose money. Plus, if you want to get more affordable housing—it is easy and CHEAP. Enforce our immigration laws and millions of illegal aliens now using affordable housing will be deported—so honest, but poor, Americans will have affordable housing. Not rocket science.
Tax Reform Talk is Slowing Affordable Housing Projects
By Ron McNicoll , The Independent, 4/20/17
Developers in the Bay Area and around the nation are holding back on building new affordable housing because of the Trump Administration’s proposed income tax reform.
Christine Steiner, who represents Pleasanton on the Alameda County Housing Authority, attended a national housing officials’ conference in Washington March 26-28. Steiner said investors who finance developers’ affordable housing projects have been able to get a 9 percent tax write-off annually. That encourages them to lend to developers.
Most of the developers of affordable housing in the Bay Area are non-profit housing corporations, such as Eden Housing. A few fair-market developers become involved in bigger market areas, such as Oakland and Berkeley, according to Christine Gouig, executive director of the county Housing Authority.
However, the Trump Administration’s next big drive in Congress will be tax reform. Aware of that, investors are thinking that the tax changes may result in their corporate income taxes dropping, making the 9 percent deduction look less appealing, said Steiner.
Currently, no developers are knocking on the door at the Housing Authority to start a project. If this continues, it looks like the Housing Authority may have to dip into the $580 million bond, approved by voters last year, in order to make up the financing gap, said Steiner. The Housing Authority has been hoping to save the money for other projects, instead of having to provide a stimulus to overcome current investor reluctance, she said.
Gouig explained how the tax credits work. The developers sell the tax credits to an investor, who then receives an income offset through the tax credits. The credits are provided annually for a period of 10 years. In exchange for the tax credits, the developer is required to make a project affordable for a minimum of 16 years, according to the federal government.
However, each state can determine its own period for how long the housing remains affordable. In California, the period is 55 years.
There is also a separate tax break available at 4 percent, which is easy to get. It’s the 9 percent is the one that’s competitive, said Gouig. Many applications are submitted for the 9 percent, but few are funded, because there is so much demand.
There are regions within regions, where a state tries to encourage projects to serve the neediest people. Kottinger Village for seniors in Pleasanton is such a project. Helping the Kottinger development qualify were points awarded after the city agreed to increase its contribution of money making it more competitive in the application process, said Gouig.
In Washington, Congressional action on the budget will also be an important item affecting affordable housing when it comes to funding Section 8 vouchers. They are used by tenants who have private landlords. The vouchers bridge the gap between the fair market rent for an apartment and what the tenant can afford to pay.
HUD has $75 million set aside for vouchers, but until Congress acts on the budget, all funds are frozen, said Steiner.
The demand is overwhelming in Alameda County for Section 8 vouchers. The last window for applying at the Housing Authority for the vouchers was open for about 10 days or so in August, 2015, said Gouig. There were 47,000 applicants, many of them registering on-line. That figure was “lotteried down” to 5000, to make it more manageable, said Gouig.
Turnover on the list is very slow. “It happens only when someone leaves the program, dies, moves away, or fails to qualify anymore. We get no new vouchers from the feds,” said Gouig.
The one bright spot has been for veterans, because Veterans Administration money is available for some veterans housing. Eden Housing plans a 64-unit project on Dublin Boulevard near Regional Street. Some 25 of them will receive county Housing Authority vouchers through the VA, which will provide case management and counseling for the veterans in the units.
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