At a time when the Vancouver area is suffering our worst housing and homelessness crisis in decades, it doesn’t make sense to throw away one of our best tools for addressing the problem.
Republicans in the U.S. House of Representatives, in their current tax plan, wisely preserved the Low-Income Housing Tax Credit that creates affordable housing across the country through private investment.
Unfortunately, they chose to eliminate private-activity bonds — which would wipe out half of its production starting Jan. 1 and have devastating effects on the preservation and construction of affordable housing.
That means nationwide and here in Washington state, thousands of affordable apartments will not be built if the House tax plan becomes law.
Private-activity bonds work hand-in-hand with the Low-Income Housing Tax Credit to raise equity and reduce interest rates for affordable apartment projects. In Clark County alone, more than 3,700 apartments have been created through this program — among almost 55,000 statewide.
Private developers and nonprofits use private-activity bonds extensively to build apartments for low-income working families and seniors.
In Vancouver, for example, nonprofit developer REACH Community Development built the Isabella Court Apartments, which opened in March in the Fourth Plain corridor with 49 affordable apartments for seniors.
Before that, the Towne Square apartments in Washougal were completely renovated. Instead of losing 40 affordable apartments, the community has revitalized them and preserved them for decades to come.
Other examples: In downtown Vancouver, DBG Properties built the 13 West and 15 West Apartments using this resource — adding more than 200 affordable apartments. Also in downtown, Vancouver Housing Authority’s First Street Apartments blends market-rate units with those affordable to working families earning up to 60 percent of area median income.
With the need for affordable housing so dire, why would we give up a cost-effective public-private partnership incentive that is proven to build and preserve affordable housing?
Much to lose
We’re giving up much more than rental housing, too. In Clark County alone, the apartments created by this program have generated an estimated 5,967 jobs, $433.6 million in local income, and $81.5 million in taxes.
Private-activity bonds are critical to more than just building apartments, they help people become homeowners for the first time. In Clark County, almost 2,500 families have used a bond-financed mortgage to buy their first home.
The list goes on. Nonprofit housing for seniors, loans for beginning farmers to buy their first acres, capital for nonprofits to build or renovate facilities (like the Clark County Family YMCA), community centers and museums — all are financed through private-activity bonds.
Tax reform is important. But shouldn’t it encourage private investment that builds affordable rental homes, creates jobs and generates income, all at the same time — instead of cutting it off?
Our representatives in Congress should support private-activity bonds and educate their leaders about their impact on Washington state. Otherwise, they are walking away from an essential resource and abandoning their constituents to deal with the affordable housing crisis alone.
Alishia Topper is a member of the Washington State Housing Finance Commission and a Vancouver city councilor.