Effect of Changes to Tax Law on Affordable Housing in St. Louis
The new tax law certainly is controversial and I am certainly not qualified to offer a detailed analysis. One area that I am knowledgeable about are Low Income Housing Tax Credits (LIHTC). This is the main program for developing affordable housing in the United States.
The new tax law would have a detrimental effect on LIHTC which relies on selling tax credits to corporate entities and using the proceeds of those sales as equity for the construction and rehabilitation of affordable housing. Since the new law significantly lowers corporate taxes, it will also lower what corporations are willing to pay for tax credits, thereby making affordable housing more difficult to complete. Missouri suffers a double whammy with the elimination of the State of Missouri Affordable Housing Tax Credit by Governor Greitens and the MHDC board. This with the addition of potential cuts in the Missouri Historic Tax Credits will have dire effects on the City of St. Louis. Written by Paul Dribin