Tax overhaul could chill US affordable housing construction

December 05, 2017 - 6:00 pm

PORTLAND, Ore. (AP) — Municipal governments worry the tax overhaul in Washington, D.C. could chill the construction of affordable housing as homelessness reaches a crisis point on the West Coast.

Officials with the housing authority in Portland, Oregon, said Tuesday that the U.S. could lose nearly 1 million units of affordable housing over 10 years if the final bill eliminates the tax-exempt status for a type of bond commonly used by developers to finance affordable housing.

The so-called private activity bonds are issued by state and local governments to private companies to finance qualified projects.

The House version would remove their tax-exempt status, making them essentially useless.

Uncertainty over the bonds' future has developers racing to lock in financing and has raised costs considerably for some projects, including a large housing complex in Portland.

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