Successful fight retains affordable housing, historic preservation and community revitalization credits in tax law: Jim Renacci (Opinion)

December 22, 2017 GMT

Successful fight retains affordable housing, historic preservation and community revitalization credits in tax law: Jim Renacci (Opinion)

WASHINGTON, D.C. -- Last month, the Children’s Museum of Cleveland reopened its doors at a new location -- one of the last remaining Millionaire’s Row mansions. At four times the size of its prior location, the museum was an instant hit with children and families around the state.

But not too long ago, the future of the museum was uncertain. The museum needed to raise millions of dollars to restore the space and transform it into a world-class museum. Thankfully, New Markets Tax Credits were there to help. More than $8 million in New Markets Tax Credits were allocated to the project, and today Ohio is better off as a result.

So why am I talking about the New Markets Tax Credit? Because it’s one of the many beneficial economic development vehicles protected within the tax reform package that passed through Congress earlier this week.

Children’s Museum of Cleveland ready to reopen in Euclid Avenue mansion

I am proud of the work my colleagues and I put into the Tax Cuts and Jobs Act. As this legislation evolved, I consistently fought to protect provisions in the tax code that directly impact affordable housing, historic preservation, and community revitalization. I am happy to report that these efforts were successful. The Low-Income Housing Tax Credit, Private Activity Bond, New Markets Tax Credit, and Historic Tax Credit are all treated favorably in the tax reform package.

The economic development benefits of the tax bill might not be as big as advertised

The Low-Income Housing Tax Credit is an essential government program that enables the construction of multifamily homes across the country. It functions by encouraging the private sector to invest in the construction of affordable rental housing by awarding tax credits for this purpose. Affordable housing would not be as prevalent or accessible without the Low-Income Housing Tax Credit, as it is directly responsible for the majority of low-income housing nationwide. While all recent tax reform proposals maintained the Low-Income Housing Tax Credit, this credit is also directly impacted by the treatment of Private Activity Bonds in the tax package.

Ohio City, Kinsman affordable-housing projects among a dozen Northeast Ohio tax-credit winners

I am a longtime supporter of Private Activity Bonds. These bonds serve as tax-exempt loans, which are administered by local governments, in conjunction with area businesses, to execute qualifying projects. Commonly, Private Activity Bonds are used to construct low-income housing, which receive about half of their funding through this vehicle. Hospitals and infrastructure also rely on Private Activity Bonds as a funding source. I am proud of the treatment Private Activity Bonds receive in tax reform, which ensures that these bonds can serve communities throughout Ohio in the coming years.

The New Markets Tax Credit is also retained in tax reform. This credit encourages private sector investment in distressed communities. Historically, distressed communities experience a lack of investment. Aside from creating jobs and growing business in these communities, the credit promotes development in local education, manufacturing, and child care programs. Ohio communities benefit from such reinvigoration. The tax reform package ensures that the private sector is incentivized to play a critical role in investing in our low-income communities.

I agree with the late President Ronald Reagan on the importance of the Historic Tax Credit. This credit is a vital part of our tax code. Here in Ohio, the Historic Tax Credit helps preserve and restore historic architecture. Historic Tax Credits are responsible for the restoration of hundreds of buildings in Ohio, including Oberlin’s Apollo Theatre and the Beaux-Arts Cleveland Trust Rotunda. It also creates jobs, grows the economy, and leverages private investment. What’s more, the Historic Tax Credit generates more money than it costs. For every dollar the government invests in this program, the Treasury Department gets back between $1.20 and $1.25. I applaud my colleagues in Congress for ensuring that the Historic Tax Credit can continue to benefit the people of Ohio for years to come.

I came to Washington to fix our broken tax code, and I didn’t forget about our communities most in need of revitalization. This tax reform package ensures that we can continue to encourage investment in communities throughout our state – from Toledo to Cincinnati and everywhere in between.

U.S. Rep. Jim Renacci of Wadsworth represents the 16th Congressional District and is a candidate for the Republican nomination for Ohio governor.


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