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Tax Reform's Unintended Effect on Affordable

Standard Communities' Scott Alter doesn't believe that Republican lawmakers set out to undercut affordable housing development and preservation, but he says that's what will happen if private activity bonds are eliminated.

By Paul Bubny | Updated on November 10, 2017

Photo of Scott Alter “We’ve also used private activity bonds to take market-rate, existing housing and convert it to affordable,” says Alter.

LOS ANGELES—In what appears to be a classic case of unintended consequences, Congressional Republicans may be on the verge of eliminating a key source of funding for affordable housing projects. The first draft of the House’s tax-reform package calls for the elimination of private activity bonds, which are used in connection with 4% Low-Income Housing Tax Credits to build, buy and renovate affordable housing—and thereby make possible much of the affordable housing sector’s activity.

“We don’t think the Republicans are aware of the effect this would have,” says Scott Alter, co-founder and partner in national developer Standard Communities, which specializes in the affordable sector. “We’re working with two coalitions to try to get the word out.”

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