2015 Legislative Priorities
We urge Congress to pass a comprehensive housing and tax reform package that improves the real estate programs and do more for American families, communities and taxpayers. In conjunction with Smart Growth America, we “Federal Involvement in Real Estate.” The first-of-its-kind report examines a wide range of federal real estate spending and commitments – totaling about $450 billion per year – including direct loans and loan guarantees, grants, and tax credits.
We believe that Congress could improve real estate programs and save over $30 billion each year by implementing the following recommendations:
1. Preserve and Increase the Housing Tax Credit. LOCUS recommends making the credit’s nine percent fixed minimum credit rate permanent, and enacting a fixed floor rate for the acquisition credit at no less than four percent. In addition, we recommend increasing the credit’s annual allocation by 50 percent.
2. Improve the Rehabilitation Tax Credit. LOCUS recommends increasing the credit to 15 percent of rehabilitation costs; broadening eligibility to include project- wide redevelopment costs; making residential buildings eligible; and changing the age criteria so that any building over 50 years old would be eligible for the credit.
3. Establish individual Mortgage Savings Accounts. LOCUS recommends Congress establish individual Mortgage Savings Accounts, an optional tool that would direct an individual’s pre-tax contributions into a savings account established to help save for their first down payment.
4. Modify the Mortgage Interest Deduction. To pay for the above three improvements, focus the MID toward first time homebuyers, not 2nd and 3rd home owners and the wealthy.
Now is the time for tax and housing reform that:
- Supports balanced housing choices
- Reinvests in existing neighborhoods
- Provides a safety net for American families
- Helps more Americans reach the middle class
We urge Congress to pass a sustainable, long-term transportation reauthorization that includes transit-oriented development financing. Developers across the country are willing to invest private dollars to improve infrastructure around transit stations – but they need some help. Low cost federal loans similar to the Federal Highway Administration’s successful Transportation Infrastructure Finance and Innovation Act (TIFIA) and Railroad Rehabilitation Innovative Financing (RRIF) would provide financing for public infrastructure near transit and rail hubs and a much-needed gap-financing tool for developers interested in building TOD.
In the Senate: Support TOD in TIFIA & RRIF
We urge support for transit-oriented development infrastructure financing legislationS.880 (TOD in TIFIA) that would provide local communities the tools needed to leverage greater private sector investment and economic development around public transportation.
- The provision would lower the cost threshold for TOD project to $10 million (instead of $50million).
- The provision would expand project eligibility criteria to include things like transit-oriented development infrastructure.
- We urge to the Senate Commerce committee to include the Railroad Infrastructure Financing Improvement Act (S. 797). This legislation, sponsored by Sen. Booker (NJ), would expand the scope of the Railroad Rehabilitation and Improvement Financing program, which currently provides financing for railroad infrastructure development, to include TOD projects near passenger rail stations.
In the House: Support a long term, sustainable transportation bill
We urge the House to pass a long-term, sustainable transportation that provides needed investments in critical transit projects, which will help unlock private sector investments – creating jobs and improving the economy. Transit creates 31% more jobs than new highway construction – almost 23,000 per billion in investments.
LOCUS urges lawmakers to eliminate or streamline federal transportation programs and policies that encourage silos, over-regulation, and red tape, while protecting programs that support community development which are critical to moving good projects forward and ensuring the economic vitality of our communities, regions, and country.
Transit Oriented Development (TOD) Infrastructure Financing Act
On March 30, 2015, Senator Brian Schatz (HI) announced legislation with Senators Ed Markey (MA) and Jeff Merkley (OR), members of the Senate Committee on Environment and Public Works, introduced Transit Oriented Development (TOD) Infrastructure Financing Act (S. 880) which would help local communities better capitalize on their transit systems to catalyze economic development by providing financing support in the form of loans or loan guarantees under the highly successful TIFIA program.
Financing would be used to construct or improve infrastructure in a transit station area to support development. Eligible borrowers, which could include states, local governments or public-private partnerships, would have to demonstrate a reliable, dedicated revenue source to repay the loan. Because communities have to repay the loan at a modest interest rate, the cost to the federal government is very low. Additionally, local communities, states and the federal government will benefit from new economic development and more resilient communities that will result from these projects.
On July 30, 2015, the Senate passed its final six-year transportation authorization bill, which included the S.880 provision.
How does it Work?
The Transit Oriented Development (TOD) Infrastructure Financing Act is modeled after the approach taken for ITS projects, which are eligible for TIFIA financing but have a lower cost threshold than other TIFIA projects. Under this legislation, TOD projects would have cost threshold of $10 million.
Why is the Legislation Needed?
Demand for living near transit is projected to double over the next 20 years to over 15 million households. To meet this demand, significant new development near transit stations will be needed. The challenges associated with financing these much-needed infrastructure improvements often present barriers to the successful implementation of TOD. In many cases local communities recognize the economic benefits associated with TOD, but lack the technical or financial capacity to overcome these hurdles.
The private sector stands ready to partner with local communities to help develop TOD and meet market demand. However, we need to establish mechanisms to allow local governments and others to successfully partner with the private sector. Without this mechanism it will remain difficult to utilize the public investment in the transit infrastructure to attract significant private-sector investment in infrastructure near transit stations.