The weeks since the presidential election have been times of uncertainty because of the unpredictability of the new administration's actual plans. As we all struggle to parse campaign rhetoric from true intentions, it's no wonder that concerns over the future of the low-income housing tax credit (LIHTC) are growing. But the LIHTC is not the only tax credit under threat that is beneficial to low-income housing advocates.
The federal historic tax credit (HTC) incentivizes private investment in the redevelopment of historic properties. In many cases, these properties are used to create affordable housing in communities out of properties that were previously in decay. Without the incentive of the HTC, among other tax credits, market forces would drive investment away from historic properties, which make up a significant portion of the real estate in urban neighborhoods and suburban and rural downtowns, leaving the properties to be a community eyesore instead of contributing to local redevelopment and increases in local tax revenues.
The future of the HTC is uncertain. Legislators, eager to eliminate certain tax credits in order to make up for spending in other areas, could put the program on the chopping block. Our cities, and our families, would be the poorer for this decision.
The HTC is worth renewing for its benefit to struggling communities alone. But research shows it does more than that: It actually creates jobs and generates income for the federal government. In 2014, the National Trust for Historic Preservation found that over the lifetime of the tax credit, the IRS issued $23.1 billion in HTC credits while directly generating $26.6 billion in federal tax revenue. These revenues come from income taxes paid by manufacturers, construction workers, and the commercial tenants that ultimately occupy rehabilitated properties.
In Chicago, our nonprofit, Mercy Housing Lakefront is using the HTC and other tax credits to renovate a historic property that sat vacant since the 1970s, the original Sears catalog printing plant on the city's west side. This winter, the unused and historic building will be transformed into a warm home for 181 Chicago families, including 300 or more children.
The renovated building, called the Lofts on Arthington, will soon generate more than $100,000 in annual real estate taxes, as well as a significant number of construction jobs, and permanent service jobs in health care, education, and other fields. Additionally, this building and others like it can help bring stability and prosperity to communities, by reducing violence, through the services we will offer, such as pre-K education, in-unit neonatal health care. and job training.
We also used the HTC to create 210 units of family affordable housing on the city's south side, known as the Pullman Wheelworks residence. Originally a manufacturing facility, the 1920s building was renovated 30 years ago, and has since provided a safe and affordable home to thousands of children and families, with household incomes at 60% or less of the area median income.
Without the historic tax credits, renovating the property would have been impossible: the building would have decayed, and an opportunity to care for Chicago families would have disappeared.
Transformations like this depend on the HTC, which is now under threat in Washington, D.C. Each day, my work allows me to see how important these tax credits are to building healthy neighborhoods. I also see how clearly they return value to taxpayers.
Renewing the HTC is a no-brainer: a clear opportunity to grow jobs and tax revenue while reducing urban blight.
Please join me in asking for the help of our federal representatives in sustaining this legislation, which helps nonprofits like ours restore decaying neighborhoods, resolve our affordable housing crisis, and care for families.