icon Blueprint for December

Palliative Construction

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3 min read

You read it right. That’s $7,000,000,000. Seven Billion. It’s the value of the New Markets Tax Credits allocated by the Treasury Department’s Community  Development Financial Institutions Fund to 120 Community Development Entities in 36 states to develop businesses and improve lives in underserved communities. It’s a one-time allocation that combines 2015 and 2016 requests for funding due to a prolonged delay in renewing this program. But whatever the timing and frustration it caused, there will now be more healthcare facilities, more schools, more parks, more manufacturing plants, more jobs, more joy, more hope.

New Markets Tax Credits is a remarkable program that encourages innovative, beneficial construction in low-income neighborhoods as a foundation for community building. You might even call it palliative construction. It provides relief to communities and inspires a healthier future.

This year-end issue is filled with information about the operation, methodology and results of NMTC. We begin with Darryl Hicks’ interview of Annie Donovan, the director of the CDFI Fund, whose background made her the ideal leader for this effort. (That doesn’t always happen in Washington, by the way.) (Talking Heads) Not all Community Development Entities are the same; they vary by size, scope, priorities.  So staff writer Mark Olshaker takes you inside offices of different shapes and sizes to give you an overview of what is available. (Inside CDEs)

Then we move on to three case studies that provide samples of the wide variety of usages of this credit: Staff writer Bendix Anderson visits the elephantine Essex Crossing project that is rejuvenating the Lower East Side of Manhattan with various housing options, schools, stores and beautiful construction; Bendix also visits the children’s Campus in Kansas City, MO, where these tax credits are expanding early childhood education; and Mark Olshaker looks at the unique Wake Forest Innovation Quarter in Winston-Salem, NC, where thousands work, live, learn and play.

We also take a look at some of the math relating to NMTC. Ira Weinstein of the CohnReznick accounting firm ponders the existence of liquidity in the NMTC space. And you will also find a list of the 21 NH&RA member companies that received allocations in this round, (Congrats to all) as well as the breakdown of usages of NMTCs.

This month both of our regular columnists, Executive Director Thom Amdur and Guru David A. Smith, felt compelled to respond to the Presidential Election.  As our association leader, Thom looks at what may come out of the fog when it clears on an administration full of unknowns. And as our resident contrarian David writes a letter to the President-elect suggesting he might actually achieve the most by encouraging more affordable housing in the blue state areas where people did not vote for him.

We hope you enjoy our visits to the world NMTCs are creating and also the upcoming holiday season.

Marty Bell, Editor