A lack of indication about what President-elect Donald Trump has in mind for the affordable housing sector has led industry leaders to wonder just how his administration will affect their operations when he takes office, especially in the realm of taxes and tax credits.
Michael Novogradac, managing partner of the Novogradac & Co. accounting and advisory firm, expects heavy tax reform but thinks that low-income housing tax credits (LIHTCs) and New Markets Tax Credits (NMTCs) could be at risk. He cites a tax proposal put forth by House Republicans earlier this year as a source of his prediction, given its critical attitude toward special-interest deductions and credits as a whole, though no specific programs are mentioned.
“This blueprint generally will eliminate special-interest deductions and credits in favor of providing lower tax rates for all businesses and eliminating taxes on business investment,” the proposal says.
“We don’t know what is on President-elect Trump’s agenda for HUD and affordable housing spending,” says Peter Lawrence, director of public policy and government relations at Novogradac. “However, given Trump’s tax and budget priorities, it is hard to imagine that such spending will increase, and indeed the affordable housing community will need to work very hard to keep what we currently have. In particular, how Trump addresses the debt-ceiling suspension that expires in March will be incredibly influential on discretionary spending in his administration.”