This blog post was co-authored by Steve Rothschild and Chris Martiner, CayCap Advisors.
State tax credits provided under Georgia’s Department of Community Affairs Housing Tax Credit Program are proven tools that are critically important in the creation of high-quality affordable housing for the citizens of Georgia.
The state tax credits incentivize local businesses and individuals to give back to their communities in a socially responsible manner, as the investments are used as a capital source, along with other state, local and federal funds, to finance and develop affordable rental communities.
The continuance of the tax credit program is critically important to all areas of the state – rural and major metro areas. Atlanta, for instance, is experiencing rapid growth in population. This has led to a tighter market and increased rental rates. Further, gentrification in many neighborhoods has effectively displaced many long-term residents, forcing them into uncertain and unaffordable circumstances.
Any talks of repeal for any of the Housing Tax Credits available under the Georgia Department of Community Affairs should be met with strong opposition – regardless of economic status or political affiliation. Affordable housing has already suffered a major setback by recent tax reform at the federal level. The reduction in the corporate tax rate to 21 percent, coupled with the BEAT provision, may cause more than 250,000 fewer units of affordable housing to be developed over the next 10 years due to less investment equity. Any state program cuts will compound the problem – further adding to the current shortage of affordable housing stock in the state of Georgia.
We encourage Georgia residents to reach out to their representatives to encourage them to vote against House Bill 851.