NAHB Responds to White House Tax Reform Proposal

Filed in Capitol Hill, Codes and Regulations, Multifamily by on April 26, 2017 5 Comments

house and coinsNAHB Chair Granger MacDonald today responded to the White House proposal to reform the federal income tax program. His statement follows:

“NAHB commends President Trump for tackling tax reform and keeping the mortgage interest deduction as one of two individual deductions. However, doubling the standard deduction could severely marginalize the mortgage interest deduction, which would reduce housing demand and lead to lower home values.

“On the corporate side, NAHB strongly supports the provision to lower the tax rate to 15% for pass-through entities. This would provide much-needed tax relief for America’s small businesses, which generate the lion’s share of job and economic growth.

“Policymakers also need to take steps to ensure that lower corporate rates do not diminish the effectiveness of the Low Income Housing Tax Credit program, particularly given that the nation is experiencing an acute shortage of affordable housing.

“NAHB looks forward to working with the White House and Congress to craft meaningful tax reform that lowers rates for small business and hard-working families while acknowledging the special role that housing plays to foster economic growth.”

For additional information, contact NAHB’s J.P. Delmore at 800-368-5242 x8412.

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  1. kim shanahan says:

    “Policymakers also need to take steps to ensure that lower corporate rates do not diminish the effectiveness of the Low Income Housing Tax Credit program, particularly given that the nation is experiencing an acute shortage of affordable housing.

    This a real issue and one that is already affecting LIHTC projects where investors are pulling out of good projects because they are betting that lower tax rates are coming and will be a sweeter deal than LIHTC. So what are the specific NAHB ideas “to ensure” that doesn’t happen? We can’t have it both ways. Another big deal is the elimination of SHOP grants. This will adversely affect every Habitat for Humanity affiliate in America. NAHB should join with Habitat lobbyists and make sure those programs stay in place.

    • NAHB Now says:

      Kim, steps can be taken to both boost credit pricing and ensure that there is adequate equity to continue to produce affordable housing under the LIHTC, even at a 15% rate.

      NAHB has long advocated for increasing the investor base, in particular for tax changes that would make purchasing LIHTCs a viable investment for S-Corp banks and other pass-throughs. More demand will put positive pressure on credit prices. We also supporting creating a minimum 4% credit floor for 30% present value deals—this will inject needed equity into deals that would otherwise be economically infeasible and allow for even more unit production.

      Another idea that we have been involved in developing with a number of other groups is outlined in this blog post: https://www.novoco.com/notes-from-novogradac/how-congress-could-offset-effects-affordable-housing-production-reduced-corporate-rate. We are confident that solutions exist and are aggressively pushing these types of ideas in our advocacy efforts.

  2. Ted Clifton says:

    I worked with a developer in Philadelphia a few of years ago who spent over a million dollars and three years preparing the LIHTC package, and did not get the award. More recently, I have been working with a local group of City and County officials to try to solve the current housing crisis in Oak Harbor, WA. After more than 1 1/2 years of talk, they have not even identified a piece of ground to build on.
    If we want to solve the affordable housing crisis, we need to have Government get out of the way, and take their tax credit, stormwater regulations, and all the rest of their bad ideas with them, and just let us do what we do best. If our Oak Harbor group had simply given us the green light to design and build to a certain size and type of home, we could have had a project in the ground more than a year ago, and it would have been finished with people living in it six months ago. Time costs money, and if Government could take the permitting time out of a low income housing project, investors would be lining up to invest, because the return would be more certain.

    • Dan MacLEISH 248 524 3244 Troy Mi 48083 says:

      Three years ago we took an option on a small piece of property to build eightteen duplexes. Planning department said we would be digging in six months. 2 1/2 years later we are just starting our underground . The planning department and city Council’s we are all fine with the 18 units, no hold up on their part. Then came the engineering reviews, Michigan Department of environmental quality, and county drain commission reviews , after all that, and I’m cutting it short, we are down to 14 units total and our pocketbooks are $88,000 lighter from revised site plans but nothing in the ground, That cost also is going up due to more required engineering , In 2000 we developed 104 units ,duplexes, with a retention pond the same size actually smaller than the one we are required to have for the new 14 units. The red tape just keeps increasing. It’s time to drain the swamp

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