Tax Overhaul Is a Blow to Affordable Housing Efforts<br />“It’s the most successful social program that nobody has heard of,” said David Erickson, director of community<br />development at the Federal Reserve Bank of San Francisco and the author of “The Housing Policy Revolution.”<br />It works like this: State governments award credits to affordable-housing developers, who transfer them to<br />corporations in exchange for equity in rental buildings whose units are set aside for low-income tenants.<br />Kate Hartley, director of the San Francisco Mayor’s Office of Housing and Community Development — the agency<br />that backstopped Mr. Falk’s development when it needed help — said the lower corporate tax rate had increased the cost of building affordable housing in the city by roughly $50,000 per unit.<br />But since renters tend to have higher incomes than in years past — households making more than $100,000 a year accounted for a third of the growth in renters over the past decade — many of the newer units are in the pricey glass<br />and steel buildings that have sprouted in downtowns across the country.<br />One result of the surge in higher-income renters is<br />that units that policymakers politely refer to as “naturally occurring affordable housing” — run-down buildings where lower-income residents can afford an apartment without subsidy — are being pulled toward the higher end of the market.<br />SAN FRANCISCO — The last time that Congress approved a sweeping overhaul of the federal tax code, in<br />1986, it created a tax credit meant to encourage the private sector to invest in affordable housing.<br />The number of renters has surged over the past decade, with the country adding about one million renters a year since 2010 — about twice as many as the previous rental peak in the 1970s<br />and ’80s, according to a 2017 report by Harvard’s Joint Center for Housing Studies.
