Awaiting action from Congress, investors are hitting the pause button on developments that use tax credits to create affordable housing.
Tax reform will come quickly under the 115th Congress. The next steps lawmakers take will have a profound effect on the affordable housing crisis. By the time legislators break for recess in August, they may have significantly reshaped, and possibly scaled back, the hundreds of billions of dollars in housing aid and tax relief authorized by the federal government.
The housing market isn’t waiting for a sign from Congress about what action Republicans will take in revamping the tax code. Anticipating lower corporate tax rates, some investors are already limiting their investments in the Low Income Housing Tax Credit, the federal government’s primary instrument for creating new affordable housing in the U.S.