MHP Connect

Act now: House plans to vote tomorrow on #taxreform

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Created: Wednesday, 15 November 2017 08:35

Written by Laura Proescholdt

Federal tax reform is moving ahead at full steam. Here’s a rundown of how the House and Senate bills impact affordable housing and community development — and what happens next.

This Thursday, the U.S. House of Representatives plans to vote on H.R. 1, the Tax Cuts and Jobs Act.

This bill would deal a major blow to affordable housing development — and therefore the health, wealth, and stability of communities across the country — if passed in its current form. Over the next 10 years alone, H.R. 1 would eliminate nearly 1 million affordable rental homes, over 1 million jobs, and nearly $100 billion in business income nationwide, according to analysis by Novogradac & Co.

The House bill undermines affordable housing and community development by:

1. Eliminating tax exempt private activity bonds, which have been essential to the creation of more than 15,000 units of affordable housing in Minnesota over the past decade. If the bill passes Thursday, the 779 units in Minnesota awarded funding this October are at risk of not being constructed or rehabilitated — obliterating $140 million in development activity.
2. Directing savings from sensible changes to the mortgage interest deduction to billionaires and corporations rather than investing in affordable homes for low and moderate income Americans.
3. Scrapping the Historic Tax Credit, which has renovated more than 40,000 structures and leveraged $117 billion in private investment over the past 25 years.
4. Reducing the corporate tax rate without modifications to the Housing Tax Credit, which will negatively impact the value of the 9% Low Income Housing Tax Credit (LIHTC). Novogradac & Co. estimates the net result will be $1.2 billion fewer dollars in equity annually.
5. Instituting an alternative inflation measure that will decrease inflation adjustments in LIHTC allocations and, over 10 years, result in the loss of 8,200 affordable rental homes, according to Novogradac & Co. analysis.

Read more: Act now: House plans to vote tomorrow on #taxreform

Investors Council Recap: Dynamic trends shaping the nation's housing markets

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Created: Monday, 13 November 2017 10:51

Written by Laura Proescholdt

What are the dynamic trends shaping the nation’s housing markets, and how do the Twin Cities stack up?

On November 1, nearly 100 Investors Council members convened to hear a special presentation on these questions by Chris Herbert, Managing Director of the Harvard Joint Center for Housing Studies. Herbert highlighted key trends from the annual “State of the Nation’s Housing” report, released in June. Here are six takeaways from Herbert’s presentation:

1) While there’s been significant growth in renter households over the past 10 years, that growth is now slowing.

From 2010 to 2015, the annual growth in renter households outpaced all previous decades. Though households comprised of a single person are the most common renters — and millennials have played a significant role in driving this trend — the growth in renter households has been diverse across age, family type, and income level. However, this growth appears to be decelerating. From 2015 to 2016, annual growth fell by 1 million renter households.

Read more: Investors Council Recap: Dynamic trends shaping the nation's housing markets

West Birch Estates to provide affordable homes to Princeton area families

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Created: Friday, 10 November 2017 06:41

Written by Laura Proescholdt

Lawmakers in Washington, D.C. are currently working on a tax reform bill that could eliminate tax exempt private activity bonds, a critical tool that supports the production and rehab of thousands of affordable homes each year. West Birch Estates is one of the many Minnesota projects at risk if that happens. Read more and take action here.

Victoria Hallin has been a leader in her community of Princeton, Minnesota for years. She’s served on the City Council for 14 years, been mayor for four, acted as EDA commissioner for 12 years, and she just started serving on the city planning commission.

“My whole heart and soul is vested in this community,” Hallin said.

But 17 years ago, Hallin had more pressing matters to deal with than building a better Princeton. Her first and only priority was to find a home for herself and her four sons. Hallin had decided to leave her husband, and over the next few months, her life changed drastically.

After Hallin moved out for a summer — a block away from her sons — she discovered that her husband had failed to pay lot rent for their mobile home. He and the boys were evicted. Because Hallin’s name was also on the lot lease, she was barred from renting for a year.

Suddenly, Hallin and her boys were homeless. And finding an apartment they could afford — let alone one that would accommodate four boys — was a major challenge due to Princeton’s shortage of affordable rentals and affordable rentals suitable for families.

Read more: West Birch Estates to provide affordable homes to Princeton area families

Real impact of #TaxReform: Homes for MN families and homeless seniors at risk

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Created: Thursday, 09 November 2017 11:58

Written by Carolyn Szczepanski

Last month, working families in Princeton, homeless seniors in Minneapolis and Minnesota residents across the state got hope for a better future when the Minnesota Housing Finance Agency (MHFA) announced its latest round of funding to create and preserve more than 1,800 affordable housing opportunities throughout the state.

Now, nearly 800 of those homes are at risk — because of a tax reform bill that could cripple the development of affordable housing in Minnesota and across the nation.

Over the past 10 years alone, nearly $2 billion in private activity bonds have supported the construction of more than 15,000 affordable rental units across the state. But the tax reform bill introduced in the U.S. House of Representative last week eliminates that vital tool. If signed into law, the bill could effectively kill projects like West Birch Estates in Princeton and Minnehaha Commons in Minneapolis, leaving hundreds of families out in the cold and millions of dollars of economic development untapped.

Read more: Real impact of #TaxReform: Homes for MN families and homeless seniors at risk