Subject: Importance of Low-Income Housing Tax Credit Comment: The President's Advisory Panel on Federal Tax Reform 1440 New York Avenue NW Suite 2100 Washington, DC 20220 Subject: Request for Comments #3 Business Submission June 8, 2005 Dear Chairman Mack, Chairman Breaux, and members of the panel, I am writing in support of the low-income housing tax credit (LIHTC) that could be jeopardized by certain tax reform proposals. The LIHTC program was created by the Tax Reform Act of 1986 as an alternative method of funding housing for low- and moderate-income households. Today, that program is widely regarded as the nation’s most successful housing production program and has resulted in the construction or rehabilitation of more than 1.3 million housing units for lower-income households. In addition to producing housing, the LIHTC is unmatched in its contribution to the renewal of distressed neighborhoods and communities throughout the United States. LIHTC properties are often the first investments in a revitalization strategy and the credit is instrumental in catalyzing public/private and community partnerships in efforts that can lead to blight reduction, home ownership increases, and retail and business development expansions. The construction of housing also creates jobs. It is estimated that building 100 units of affordable housing generates 112 local jobs during the first year of construction and 46 jobs every year thereafter. Directing capital to affordable housing through tax incentives creates net economic efficiencies because the housing credit is more effective than any direct spending program can be in marshaling private sector capital and setting up competition between developers for credit allocations and among corporations for access to investment opportunities. We urge you to protect the LIHTC in any tax reform actions undertaken because we as a nation will continue to face a serious affordable housing shortage that must be addressed to ensure that our most vulnerable families have access to quality, affordable housing and safe neighborhoods. Thank you. Very truly yours, Novogradac & Company LLP by Michael J. Novogradac |