GOP Tax Proposal Would Gut Affordable Housing, State Officials Say
By Katy Murphy
The Mercury News
3 November 2017
Photo courtesy of RRM Design Group
Image: Moylan Terrace, a mixed-income affordable housing construction in San Luis Obispo, CA
A GOP tax proposal, which is currently under review, would eliminate tax exemptions that generate a $2.2 billion annually for affordable housing construction in California. This proposal has arrived less than two months after California passed bills to build more subsidized rental housing for the poor and would eradicate an existing program that created approximately 20,000 affordable homes last year.
Carolina Reid, Assistant Professor of City and Regional Planning at the College of Environmental Design, specializes in topics of housing, access to credit and homeownership, and community development. Reid argues that the passing of this proposal would be “absolutely devastating” for California.
“California, with the housing package, was taking such a leadership role in addressing the housing crisis, and that can be completely undermined by these federal efforts,” she said. “It’s really troubling.”
California was predicted to construct approximately 90,000 affordable housing units as a result of a $4 billion statewide bond. However, that figure will be cut in half if the tax proposal were to pass. The proposal will interfere with California’s efforts to aid those who have been most affected by the housing crisis: seniors, poor, and disabled people.
“The newly released House Tax Reform bill would be catastrophic for affordable housing in California,” wrote Tia Boatman Patterson, executive director of the California Housing Finance Agency, in an alert sent Thursday to a handful of colleagues and groups, calling for “all hands on deck.”
Advocates of the tax reform proposal argue that the change will simplify the current tax code which is “hopelessly complex” and it will eliminate state and local deductions. However, others counter that the proposal will disrupt affordable-housing projects in two significant ways: “first, by eliminating a key tax credit, and second, by making the tax credits preserved under the federal proposal less valuable.”
Read more details about the tax reform proposal here.