Letter from the Executive Director – Proposed Federal Tax Reform is Bad for Oakland
Update: The recently announced Senate version of the tax bill retains the housing tax credit and tax exempt bonds that are cut by the House. The House and Senate will negotiate to reconcile differences between the bills. This means that the primary funding for affordable housing is still on the chopping block. We urge you to visit The Non-Profit Housing Association of Northern California’s website for ongoing updates on this development.
Dear Friends and Colleagues of EBALDC,
Everyone’s talking about the Republicans’ plans for big changes in the tax code, including huge cuts in taxes for corporations and the wealthy. What people aren’t talking about is how the GOP plan pays for these cuts by robbing communities like Oakland of important resources that help us create the affordable housing required to build healthy neighborhoods.
Buried in the proposed legislation is a provision eliminating the tax-exempt status of bonds used to finance affordable housing. Not only would this make the bonds, which are used to build critical infrastructure like schools, hospitals and other public resources, much less attractive to investors, but it also would effectively eliminate the federal 4% housing tax credit that creates more than 20,000 affordable homes in California each year.
To put it simply, this is a bad idea—one that is going to devastate communities already in need. The housing tax credit is far and away the most important tool we have to address our affordable housing crisis. And it’s not the only provision of the tax plan that’s going to cause problems for Oakland’s efforts to build inclusive, vibrant and healthy neighborhoods. The bill also eliminates Historic Tax Credits that have been used to support the redevelopment of such projects as Swan’s Market, the California Hotel and other local landmarks.
And it guts the New Market Tax Credit used in Oakland and other places across the country to help spur economic development in low-income areas. Without this credit, Oakland wouldn’t have been able to make Preservation Park, the Greenlining Institute headquarters , The Fox Theater, and the expansion of the East Oakland Youth Development Center into what they are today.
In sum, Oakland would not be the city we know and love today if it were not for vital tax incentives that have encouraged and supported neighborhood redevelopment and the construction and maintenance of high-quality affordable housing. At the East Bay Asian Local Development Corporation, these incentives are absolutely essential to our ongoing work to strengthen and revitalize healthy neighborhoods.
And now, Republicans in Congress are proposing to eliminate these incentives and hurt our communities, just so they can significantly reduce the tax rate for corporations. Together, we need to tell Congress that these pennywise and pound-foolish cuts just don’t make sense.
If you live in a district with a Republican representative, contact them today and let them know the current tax proposal would hurt communities in the Bay Area and nationwide. If you don’t live in a Republican district, you can still help by spreading the word about the devastating impact this legislation will have on our communities.
Diverse, mixed-income neighborhoods are critical to building equity and opportunity and to making our cities great places to live and work. We need to encourage and incentivize investments that will help all people thrive.
For more concrete details on what you can do to help, please visit The Non-Profit Housing Association of Northern California’s website.