The National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA) issued a joint statement Wednesday in response to the release of the federal “Big Six” tax reform outline. The two trade groups have partnered in the Protect the Lease campaign, which aims to promote and protect the interests of the apartment industry in the coming negotiations.
“NMHC/NAA welcome the release of the Republican tax reform framework and applaud the efforts by lawmakers to develop pro-growth tax reform that will create jobs and spark economic growth,” the Wednesday release states. “We look forward to discussing with Congress our members’ key issues in the proposal, and the impact of the package on the apartment industry and its potential to help solve America’s housing affordability crisis.”
Among other measures, the framework of the Big Six, which includes Treasury secretary Steven Mnuchin, National Economic Council director Gary Cohn, and top congressional Republicans, calls for a corporate tax-rate cut from 35% to 20%.
The Protect the Lease campaign supports a tax policy that would accomplish three main goals: promote economic growth, create jobs, and invest in American neighborhoods and communities.
Specifically, the NMHC and NAA call on lawmakers to protect “flow-through” entities by preserving the pass-through business model and treating these entities equal to corporations when it comes to tax-rate cuts. The platform notes that flow-through entities make up three-quarters of the apartment housing industry.
The two organizations also entreat lawmakers to maintain the full interest deduction for businesses as well as “like-kind” exchanges, whereby property owners can reinvest in apartment communities.
The NMHC and NAA ask Congress to preserve property owners’ ability to depreciate their assets with tax rules that account for wear and tear, insisting the measure is necessary for the apartment industry to meet future demand. In addition, they request that carried interest continue to be treated as a capital gain in order to mitigate risk for real estate developers.
Finally, the NMHC and NAA applauded the Big Six for retaining the low-income housing tax credit (LIHTC), stating, “we will work to ensure that tax reform does not inadvertently diminish this valuable tool.” The Protect the Lease platform emphasizes that the LIHTC has created nearly 3 million affordable units and will continue to alleviate the country’s affordable housing shortage.
“We will continue working with policymakers on the specific needs of our industry in tax reform so that we can continue serving the 39 million Americans who call apartments home and the 12.3 million jobs supported by the multifamily sector,” the trade groups said.
