New York Will Lose $4.5 Billion in Affordable Housing Investment, 17k Affordable Homes & 28,000 Jobs Annually
TAX PLAN FAILS AFFORDABLE HOUSING: Despite the fact that The Tax Cuts and Jobs Act (HR 1) released by House Republicans last week claims to preserve the Low Income Housing Tax Credit, the tax reform bill would repeal Private Activity Bonds (“Volume Cap”), which would effectively eliminate the 4% Housing Credit. That means if this bill passes, New York would lose $4.5 billion in affordable housing investment annually and 17,000 affordable homes will not be built every year. Nationwide, the future supply of affordable rental housing is estimated to be reduced by nearly 1 million units, according to analysis by Novogradac & Company LLP.
Contrary to the tax bill’s promising title, New York State is slated to lose 28,000 jobs related to the elimination of housing bonds each year. Link to our infographic, Tax-Exempt Bonds = Housing Jobs for more information.
For more details on our analysis of affordable housing impact issued on Friday, link here and find press coverage below:
• Politico NY: Republican Tax Plan Would Decimate Affordable Housing in New York, Advocates and City Officials Warn
• Real Deal: The Good and Bad News About the GOP Tax Plan
• Curbed: Affordable Housing Advocates Say Trump Tax Reform Bill Is ‘Devastating’
• Staten Island Live: NY Affordable Housing Advocates Protest Federal Tax Reform Bill
Repeal of Private Activity Bonds is a blow to low-income New Yorkers struggling to pay rent – one that will undermine both the State’s and the City’s ambitious housing plans.
Disaster-Impacted Areas Across the U.S. Will Lose Critical Housing Recovery Financing
TAX BILL FAILS DISASTER RECOVERY: Any large scale affordable multifamily housing rehabilitation or development for low-income communities will rely on tax-exempt Private Activity Bonds. In the aftermath of a series of unprecedented natural disasters destroying homes and neighborhoods in Texas, Florida, California, Puerto Rico, the US Virgin Islands and several other states, it is unfathomable that Congress would move to strip communities of the resources necessary to rebuild.
In NY, we know how crucial Private Activity Bonds are for rebuilding public housing. In the aftermath of Sandy, Ocean Bay (Bayside) in the Rockaways was flooded and building systems were underwater. $213 million in Private Activity Bonds were used in conjunction with HUD’s RAD program to leverage private investment to relocate the building’s heating system, protect residents and infrastructure from water penetration and rehabilitate 1,400 apartments in need of basic improvements. HUD and FEMA funding on their own were not sufficient to meet the capital needs of this storm-ravaged project. Other multifamily housing in disaster-impacted areas will be in the same situation requiring Private Activity Bonds.
Residents of public and affordable housing in other storm-batters regions should be afforded the same resources for recovery. In 2016, Texas used $580 million in Private Activity Bonds for multifamily housing and another $31 million for affordable homeownership. Texans’ needs are certainly heightened post-Hurricane Harvey, with officials estimating $9 billion is needed to assist in the short-term and long-term recovery of damaged single family and multifamily housing stock in Houston. Similarly, Florida utilized $460 million in Private Activity Bonds for multifamily housing in 2016 and $92 in affordable homeownership.
Now is not that time to deny access to low-cost financing and availability of 4% Low Income Housing Tax Credits with billions in housing recovery needs ahead of these and other states.
NYCHA Will Lose $3 Billion Impacting 34,000 Residents
TAX BILL FAILS PUBLIC HOUSING: The repeal of Private Activity Bonds is essentially the end of HUD’s Rental Assistance Demonstration (RAD) in New York, a critical preservation tool that converts public housing to a rental assistance platform to leverage private investment. It is the only program that can raise sufficient capital to bring public housing into a state of good repair. RAD works with Private Activity Bonds, which generate as-of-right 4% Low Income Housing Tax Credits. In addition to hundreds of units slated for RAD conversion upstate, the New York City Housing Authority (NYCHA) has plans to reduce their capital backlog by $3 billion by preserving 15,000 apartments in this program over a decade, improving living conditions for 34,000 residents.
The preservation of 1,700 affordable homes is immediately at risk. These homes, prioritized for the severity of repairs needed, were slated for investments of $300M in public-private investments. A developer is to be selected in the coming month and soon after the project would seek Private Activity Bond financing.
Congress has been underfunding public housing for years. Building conditions are deteriorating due to leaky roofs, failing plumbing and water-penetrating facades in an aging infrastructure starved of capital improvements. Nationwide, $26 billion of outstanding capital repairs go unattended each year due to insufficient budget appropriations. In NYC where public housing is a vitally important affordable housing asset, $17 billion in capital repairs are needed.
Absent Private Activity Bonds, public housing will continue on a cruel course of shameful federal neglect.
WE NEED YOU TO TAKE ACTION TODAY!!!!!!!!
Please join us in advocating against the elimination of Private Activity Bond! Take these 3 steps:
- Call your member of Congress and also call NY Republicans, especially Rep Tom Reed (23rd) on the Ways & Means Committee linked here: Members of Congress
- Tell them that the elimination of tax-exempt bonds would hurt low-income renters in need of affordable housing.
- Ask for Private Activity Bonds to be restored in the Chairman’s Amendment