As the House and Senate debate tax reform, a private activity bond that is important to financing affordable housing projects is at risk. The video story features images of two APAH properties (Gilliam Place and Fisher House).
Summary (from the article):
- The House tax plan cuts bonds that fund affordable housing.
- The Senate plan keeps the bonds.
- Private activity bonds are tax exempt and are issued by state or local governments and loaned to private companies to finance housing, hospitalsand infrastructure.
See the original CNBC article and video here.
“Tax-exempt private activity bonds (PABs) are issued by state or local governments and loaned to private companies to finance qualified projects. The bonds are most commonly used for the construction of affordable multifamily housing, but also for hospitals and infrastructure projects, like roads and bridges… The elimination of these bonds is bigger than just its face value. The bonds are a pathway for developers to gain access to the low income housing tax credit. Lawmakers kept that intact but effectively hollowed its efficacy because about half of those credits are granted in conjunction with the private activity bonds.”