Tax overhaul threatens affordable housing deals

A rendering of the Ingersoll Senior Residences, which is planned to house 145 affordable units for seniors in Brooklyn but is facing a funding gap due to the decline in the value of certain tax credits. /PHOTO: MARVEL ARCHITECTS

Expectations for a lower corporate tax rate have pushed down the value of credits used in project funding

By Laura Kusisto | The Wall Street Journa;

The possibility of a tax-code overhaul is casting a shadow over the $10 billion affordable-housing industry, which receives tax credits so valuable they often determine whether or not projects get off the ground.

Members of Congress and President Donald Trump have proposed reducing the corporate tax rate to 15% to 20% from the current 35%, dimming the allure of a credit investors such as big banks and insurance companies receive to offset income taxes. Affordable housing, which represents about one-quarter of all new apartment construction in the U.S., relies on the credit for capital.

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