This week, NMHC leaders participated in the 2017 LOCUS Leadership Summit: P3 is for Partnerships, Placemaking, and Policy. LOCUS is an organization that brings together forward-thinking real estate developers and policy makers committed to better balancing federal housing and transportation policy.
Clyde Holland of Holland Partners served as the opening day’s keynote speaker, delivering remarks that described the housing shortage America faces and how small but significant policy changes at the federal level could change that. Holland described how changing demographics, coupled with a desire of an increasing number of Americans to live closer to urban core locations, has led to a need to better align transportation and housing policy to incentivize development of housing where it is needed most. Specifically, Holland called for the adoption of a “5% Solution” which would entail requiring localities that receive federal transportation aid to set aside 5% of land near transit locations and incentivize development of high-density, residential real estate through implementing “as of right” zoning policies that reduce costs at all stages of development and operation and can ultimately lead to lower rents being charged. Some additional steps Holland felt could drive investment are the limiting of impact fees and income restrictions and by offering limited forms of tax abatement for developers. Holland argued that a small shift in federal policy like this could lead to huge gains in needed housing supply by shifting the cost curve, saving energy consumption, and allowing investments that make financial sense for developers.
NMHC President Doug Bibby joined LOCUS for their Federal Real Estate Policy Forum on Capitol Hill and spoke about the multifamily industry’s federal priorities for 2017. Specifically, Bibby highlighted the continuing affordable housing shortage and accompanying affordability challenge and identified key ways that federal policy changes at the federal, state, and local levels could move the needle and help foster more development. First, Bibby talked of the multifamily industry’s ongoing support for the creation of a Middle-Income Housing Tax Credit (MIHTC) that would help address the development and affordability challenges felt by the very heart of our nation’s middle class. Under the proposal, the tax credits would be distributed competitively to finance 50 percent of the cost of qualifying units in a development that ensure that 60 percent of units are affordable to families earning no more than 100 percent of area median income.
Another, less talked about area of federal policy that Bibby highlighted was the need for an extension of the EB-5 investor visa program. The program allows foreign investors to invest in a commercial enterprise that creates 10 full-time jobs to receive a green card approximately two years after investment in the project. The EB-5 immigrant investor program has become an important source of investor capital for the multifamily industry and overall has brought billions of dollars of investment to the U.S. and created thousands of jobs. Bibby reiterated that the apartment industry continues to call on Congress to permanently extend the EB-5 program and ensure reforms are in place that maintain the integrity of the program and its goals.
As the Trump Administration and Congress contemplate a path forward on a potential large-scale infrastructure investment package, NMHC will continue to work with policymakers to represent the interests of the multifamily industry. NMHC has long argued that housing must be a part of the conversation and encourage that any federal funds in the expected infrastructure package be tied to a locality’s willingness to incentivize development in such a way that it gets housing constructed more quickly and at a more affordable rate. NMHC also believes that as demographics and consumer preferences are reshaping where and how Americans want to live, federal investments should be geared toward leveraging Transit Oriented Development (TOD) and incentivizing development of all types to revitalize neighborhoods, reduce transportation costs, and make our communities more sustainable.