#RethinkRealEstate

Senators introduce bi-partisan legislation that would improve the Historic Rehabilitation Tax Credit

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American Brewing Building, Baltimore, MD
The American Brewery Building in Baltimore, MD, was redeveloped with the help of the Historic Preservation Tax Credit. Photo via the National Trust for Historic Preservation.

In June Senators Ben Cardin (D-MD) and Susan Collins (R-ME) introduced S. 1141 The Creating American Prosperity Through Preservation (CAPP) Act, a bill that would encourage developers to invest in and restore historic buildings by updating the Historic Rehabilitation Tax Credit program.

Since its inception in 1976, the Historic Rehabilitation Tax Credit program has leveraged more than $106 billion of private-sector investment to preserve and rehabilitate more than 38,000 historic properties. The credit program has rehabilitated more than 75,000 low- and moderate-income housing units. In fact, nearly 75 percent of Historic Tax Credit projects are in low-income areas.

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Rethink Real Estate: Reform the Federal Housing Administration’s Single Family Home Program

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HUD Headquarters in Washington, DC
The U.S. Department of Housing and Urban Development headquarters in Washington DC. Photo by Ryan Orr via Flickr.

This is the second in a series of posts discussing recommendations from our new platform Federal Investment in Real Estate: A Call for Action. The series highlights what is lacking in current federal real estate policy and how our recommended improvements could generate better returns for families, communities and taxpayers.

The Federal Housing Administration (FHA) has helped millions of families purchase their homes, and ensures mortgages are widely available during times of economic distress when banks and other financial institutions tighten lending standards. As the housing market rebounds, however, it’s time to refocus this program on its original mission.

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Rethink Real Estate: Eliminate some rate subsidies from the National Flood Insurance Program

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Clarksville, TN
Federally subsidized flood insurance makes it easier to build homes in flood-prone areas. Image via Wikimedia.

This is the first in a series of posts discussing recommendations from our new platform Federal Investment in Real Estate: A Call for Action. The series will highlight what is lacking in current federal real estate policy and how our recommended improvements could generate better returns for families, communities and taxpayers.

The National Flood Insurance Program (NFIP) is intended to provide property owners and renters with a way to financially protect themselves from flood damage. Administered by the Federal Emergency Management Agency, the NFIP works closely with nearly 90 private insurance companies to offer flood insurance to homeowners, renters and business owners.

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Taking a close look at the federal government’s spending on real estate

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The following post was crossposted on the U.S. Green Building Council’s blog.

The biggest real estate investor in the United States isn’t Donald Trump, and it’s not a private equity firm.

Spending or committing roughly $450 billion a year, the federal government is by far and away the largest investor in real estate in the country. This spending spans 50 federal programs at half a dozen agencies, and includes everything from loans and loan guarantees to tax credits to low-income housing grants. If you include the quasi-governmental enterprises Fannie Mae and Freddie Mac, the amount of money the government spends each year on real estate is even larger.

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Rethink Real Estate: The Housing Credit

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Trumbull Park Homes, a low-income housing development in Chicago, Illinois. Photo by Robert R. Gigliotti via Flickr.

In January, Smart Growth America released Federal Involvement in Real Estate, a survey of over 50 federal programs that influence real estate in some way. This post is the second in a series taking a closer look at some of the programs included in that survey.

Congress began the Low-Income Housing Tax Credit (LIHTC) program in 1986 to incentivize the private sector to develop more affordable rental units for low-income households. Since its creation, the credit has created or preserved nearly two million affordable rental units across the country.

The program offsets investors’ federal income tax liabilities, but the responsibility for administering the program is delegated to the states. States designate housing credit agencies to distribute a pool of tax credits from the U.S. Department of Treasury based on their population. In 2010, the amount of credits agencies received was equal to the greater of $2.10 per capita or $2,430,000. For example, the population of Oklahoma in 2010 was about 3.6 million people, so the state received about $7.7 million in tax credits, or 3.6 million multiplied by $2.10.

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Rethink Real Estate: Qualified Energy Conservation Bonds

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The Parker Ranch installation in Hawaii. Photo by the U.S. Department of Energy.

Earlier this month, Smart Growth America released Federal Involvement in Real Estate, a survey of over 50 federal programs that influence real estate in some way. This post is the second in a series taking a closer look at some of the programs included in that survey. Today’s post is about Qualified Energy Conservation Bonds .

Qualified Energy Conservation Bonds (QECBs) give state and local governments a low-cost financing option to encourage energy conservation.

Funding from the program has been used to retrofit public buildings, to power buildings with renewable energy, and to improve public transit infrastructure. Authorized by Congress as part of the 2008 Energy Improvement and Extension Act, the original legislation allocated $800 million in federal funding to the effort and has since been increased to $3.2 billion as a result of the 2009 American Recovery and Reinvestment Act. As of July 2012, about $760 million in allocated funding had been spent. Because QECBs do not have to be spent within a certain time period, a great deal remains untapped.

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Rethink Real Estate: All about the New Markets Tax Credit

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The Ely Walker building in St. Louis, MO was redeveloped with the help of the New Markets Tax Credit. Photo by Nick Findley via Flickr.

Earlier this month, Smart Growth America released Federal Involvement in Real Estate, a survey of over 50 federal programs that influence real estate in some way. This post is the first in a series taking a closer look at some of the programs included in that survey. Today’s post looks at the New Markets Tax Credit.

New Markets Tax Credit allows individual and corporate investors to receive a credit against their federal income tax return in exchange for making an investment in a specialized financial institution called a Community Development Entities (CDE). Congress created the credit in 2000 as a way to attract private capital to businesses in economically challenged communities. Authorized under the Community Renewal Tax Relief Act of 2000, the program has appropriated billions of taxpayer dollars to promote investment in these areas that are often overlooked by traditional financing sources.

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Have you asked Congress to rethink real estate?

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Most Americans don’t know that the government spends $450 billion each year on real estate. And few – if any – know the full impact of these expenditures.

Join the call to examine this spending. Sign our petition calling on Congress to take action.

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What type of development does $450 billion a year support? Ask Congress to investigate.
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Join the call to Rethink Real Estate

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Earlier today, we released a new report about the federal government’s involvement in real estate. This spending represents billions of dollars of taxpayer dollars, and impacts Americans on every street in every town and city across the country.

We’re calling for action, and we want you to join us. Add your name to the petition asking Congress to examine this spending and better coordinate federal programs.

We know what programs this funding goes to, but how does it impact American families? Is it supporting U.S. communities? And are taxpayers getting the best return on their investment? All of these questions should be answered.

As the 113th Congress begins its new work, with the Presidential Inauguration just two weeks away, and as budget concerns continue to be a focus of debate in Washington, now is a unique opportunity to examine this spending.

Ask Congress to examine federal real estate spending. Take a moment to add your name to the national petition, and share it on Facebook or on Twitter with the hashtag #RethinkRealEstate.

Federal investments could help American communities grow stronger and more vibrant — in addition to achieving their goals of homeownership and housing security. Call on Congress to examine these programs today.

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