This ‘Loophole’ Is Vital to Housing the Poor … NOT!
Dear Mr. MacDonald, Chairman, National Home Builders Association (NHBA); yours is a carefully crafted letter (below), but your organization’s agenda speaks volumes before you say a word and then when you do speak you only endorse what the article describes as a subsidy for developers, investors and the financial industry. Your assertion that the article, click Kill the Loopholes, Including the One for ‘Low-Income Housing’ is misleading with regard to zoning and regulatory reforms is itself misleading. Unlike your letter, the article documents its sources (1) A 2005 study found that restrictive regulations have doubled the price of housing, and (2) numerous academic studies suggest that zoning reduces the supply of multifamily housing, which hits low-income families the hardest. This website provides additional sources.
WSJ, Letter – This ‘Loophole’ Is Vital to Housing the Poor
The Low Income Housing Tax Credit is needed now more than ever.
Chris Edwards and Vanessa Brown Calder’s “Kill the Loopholes, Including the One for ‘Low-Income Housing’” (op-ed, Sept. 19) calling for the elimination of the Low Income Housing Tax Credit misleadingly suggest that zoning and regulatory reform itself can sufficiently reduce the costs required to provide feasible rents. This is simply not true, and it is why a federal subsidy is absolutely necessary to promote the construction of sorely needed rental apartments. Virtually no affordable rental housing is built or rehabilitated in the U.S. without some government incentive because rents which are affordable to low-income people are insufficient to cover development and operating costs. Harvard University’s Joint Center on Housing Studies reiterates this point, noting that the “rising costs of construction make it difficult to build new housing for lower-income households without a subsidy.”
During the past three decades, this extraordinary partnership between state and local governments, for-profit and nonprofit builders, and private investors and lenders has resulted in the construction and rehabilitation of more than 2.9 million rental homes for the most vulnerable members of our society, including the formerly homeless. Millions have had their lives transformed by obtaining safe, decent and affordable housing through this program.
With the number of households spending more than 50% of their income on rent hitting an all-time high of 11 million in 2014, the Low Income Housing Tax Credit is needed now more than ever. A bipartisan consensus is emerging on the need to expand the program.
Chairman, National Association of Home Builders