Sen. Johnny Isakson (R-Ga.) says tax reform is coming within the next four years.
“We’re not going to do tax reform this year,” he said at AHF Live: Housing Developers Forum in Pentagon City, Va. “It’s highly unlikely we’ll do it next year, but I think in 2017 and ’18 it will be the issue.”
That may offer some temporary relief for a low-income housing tax credit (LIHTC) industry concerned that its program could be changed or even eliminated as part of a sweeping legislative effort, but Isakson told developers that four years is not a lot of time. The industry needs to continue to make the case for the LIHTC.
“I make you no promises about what Congress will do except that people who don’t come to Washington to talk about the importance of tax issues to them are going to lose,” he said. “In Washington, if you’re out of sight, you’re out of mind.”
Without lobbying, there may be no LIHTC program when tax reform takes place, warned Isakson, who revealed this week that he has Parkinson's disease but will seek re-election next year.
“You’ve got a great story to tell about the low-income housing tax credit and you can make a great case for preservation,” Isakson said. “The low-income housing tax credit has done remarkable things for the quality of housing, the attraction of private capital, and lessening of government involvement overall. That’s all a good thing, but you’ve got to make that case. There are a lot of good people in Washington, but not too many know about your business.”
To change that, the industry needs to educate members of Congress.
It’s just as important to reach out to Congressional staff, said Isakson, whose team includes 10 field representatives across Georgia. “You want them to see your projects too,” he said. “… I spend most of my time when I’m back in Georgia following up on visits made earlier in the year by members of my staff to a site they think I ought to see.”
He said he has two rules on tax reform. No. 1 is no clawbacks. No. 2 is make it comprehensive. “Don’t go reform C corps and say we’re not going to worry about S corps right now or LLCs,” Isakson said.
Isakson, a former Realtor, also said Freddie Mac and Fannie Mae have been important to the country. “I’m a big advocate for the reform of Freddie and Fannie,” he said. “I’m a big advocate also for doing a model that allows us over time to privatize them, but you can’t go cold turkey.”
It’s important the mortgage guarantees the government-sponsored enterprises have been providing remain until they mature to a point they can be privatized, he told the audience.
Rick Goldstein, a partner at the Nixon Peabody law firm and a longtime LIHTC advocate, asked the legislator what he was hearing from his colleagues about the housing credit and what issues need attention. Goldstein, Emily Cadik, senior analyst and project director at Enterprise Community Partners, and David Gasson, vice president of Boston Capital and executive director of Housing Advisory Group, were part of a legislative issues panel at the conference.
Many members of Congress aren’t familiar with the LIHTC and don’t understand affordable housing, according to Isakson.
“The point you need to make is what the LIHTC has done is re-energized affordable housing for the American people in a way other than being provided by government agencies,” Isakson concluded. “It’s using the tax code as a catalyst to attract capital to build a product that otherwise might not be built and developed that will benefit the people in the country.”