Community Developments: Tax Incentives for Impact Investments through CDFIs
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- On Tuesday, Enterprise Community Partners and the Accelerating Impact Investing Initiative (AI3) released a new issue brief on tax incentives for impact investments through Community Development Financial Institutions (CDFIs). According to the brief, the amount of investment capital flowing to support disadvantaged individuals, businesses and communities could be greatly increased if impact investments through CDFIs carried a tax benefit. The issue brief takes a close look at two state tax credits (in California and South Carolina), both of which have proven effective in increasing the amount of capital invested in underserved communities to develop affordable homes, support small businesses and create jobs. Learn more about tax incentives for impact investments in Enterprise’s blog post.
- This week’s Spotlight on HOME blog post tells the story of Ms. Ana Armijo, a Calistoga, California, resident living on a very low, fixed income who struggled to maintain her mobile home after suffering a stroke. Ms. Armijo’s home had water damage to the walls and ceiling, as well as rot that allowed moisture infiltration into the home. In 2015, she applied to Calistoga’s Owner-Occupied Rehabilitation Loan Program and, with the help of HOME funds, was able to make repairs that made her home safer and more comfortable. full results of a critical study that identifies the most efficient and cost-effective ways to house and serve homeless families. The Family Options Study discovered that 37 months after enrolling into the study and being randomly assigned into one of four interventions, the families who were offered a long-term housing subsidy experienced significant reductions in subsequent homelessness, housing and school mobility, adult psychological distress, intimate partner violence and food insecurity. According to Kathy O’Regan, HUD’s assistance secretary of policy development and research, “The evidence from this study indicates that having access to deep long-term housing subsidies produces substantial benefits for families.” (HUD, October 25)
- According to a study performed by Trulia and UtilityScore, utility bills can have an enormous impact on housing affordability, particularly in less expensive areas. Nationally, single-family homeowners spend a median of $2,715 annually ($226 monthly) on utilities, or 1.4 percent of the median single-family home value. Of the largest 100 metropolitan areas, Atlanta has the most expensive median annual utilities at $4,353, or 2.6 percent of the median home value. (Trulia, October 26)
- Last week, Airbnb filed a federal lawsuit against New York City after Governor Andrew Cuomo of New York signed legislation that would impose fines of up to $7,500 on Airbnb hosts who break local housing regulations. Since 2010, it has been illegal in New York to rent out a whole apartment for less than 30 days. However, some landlords have been using Airbnb to rent out their apartments for shorter periods. Airbnb’s lawsuit argues that the new legislation would cause significant burdens, as Airbnb would be required, in order to avoid liability, to screen and review every listing a host seeks to publish. On the other hand, some regulators and affordable housing advocates argue that Airbnb facilitates short-term rentals that can negatively affect local rental supply and housing affordability. (The New York Times, October 21)
- A new report by the McKinsey Global Institute provides a toolkit that addresses closing California’s housing gap, with the goal of fixing the state’s chronic housing shortage. According to the report, the housing shortage costs the state more than $140 billion per year in lost economic output, including lost construction investment, and residents pay a collective $50 billion for housing more than they are able to afford. The report recommends policy ideas that aim at increasing California’s housing production, including accelerating land-use approvals and construction permitting. In addition, the report identifies “Housing Hot Spots,” where five million new housing units can be built, such as vacant lots, surface parking lots and single-family houses on double lots. (The New York Times, October 25)
- Developed by Policy Link and the University of Southern California’s Program for Environmental and Regional Equity (PERE), the National Equity Atlas has been updated this week to include indicators that show differences in educational and job opportunity equality, including neighborhood-level data on race/ethnicity, people of color, unemployment and “disconnected youth” who are 16-to-19-year-olds who are neither working nor in school. (The Atlantic CityLab, October 24)
- In a new blog post, the Harvard Joint Center for Housing Studies (JCHS) writes about a recent report by HUD that examines the impact of The First-Time Homebuyer Education and Counseling Demonstration (HEC) on a wide variety of outcomes related to homeownership preparedness, including financial literacy, budget management and homeownership sustainability. Early findings reveal that treatment group members (members who received in-person and remote services) performed better than their control group counterparts on a four-question mortgage literacy quiz, are more likely to report that they would contact their lender before missing a mortgage payment, and are more likely to have a credit score of 620 or higher. However, there is no evidence that counseling and education have helped treatment group members improve their budgeting practices. (JCHS Housing Perspectives, October 25)
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