There’s a lot in there for real estate investors of all kinds to digest in a plan that allocates $318 billion for housing and community development in the form of $213 billion in direct spending and $105 billion in tax proposals.
High hopes for Low-Income Housing Tax Credit
Among the bigger items is an expansion of the Low-Income Housing Tax Credit (LIHTC). “As the federal government’s primary tool for financing affordable housing, LIHTC currently produces an estimated 100,000 units per year,” the White House fact sheet says. “President Biden’s plan will build on this success by proposing to invest an additional $55 billion in tax credits, enabling the creation of tens of thousands more units each year, including more units in high-opportunity neighborhoods.”
There’s more, lots more, including $45 billion for the National Housing Trust Fund, $40 billion for a public housing trust fund, and $20 billion for a new tax credit for revitalizing single-family homes in distressed communities through what’s now before Congress as the Neighborhood Homes Investment Act.
The list also includes weatherization, lead removal, and resiliency improvements for communities particularly vulnerable to climate change (e.g., coastal flooding), plus renovation funds for downtown business districts (heads up, retail space investors). Senior citizen housing and incentives to build and renovate more-affordable rental homes also are included.
“The Biden-Harris Administration is proposing a bold investment in America’s housing infrastructure and make housing more affordable for working and middle-class families,” the White House says.
The Millionacres bottom line
Affordability certainly does seem to be a growing issue in a white-hot housing market, and this complex, far-reaching proposal could well result in expanded opportunities for investors across the real estate spectrum.
The Novogradac consultancy provides a tidy encapsulation of what’s in the plan in this blog. Meanwhile, the political gears grind.
As the Novogradac blog’s author, Peter Lawrence, says, “Bipartisan negotiations on infrastructure are ongoing, but as Memorial Day approaches without any agreement, it appears more likely that congressional leadership will turn to considering the American Jobs Plan and the American Families Plan on a partisan basis via budget reconciliation.
Lawrence adds: “Many of these proposals have strong support with congressional Democrats and would be likely included in any such infrastructure reconciliation legislation. Stay tuned.”
Originally Appeared Here