Smart tax policy key to Ohio’s housing future

For three decades, I’m proud to have worked for a company that has helped to transform the lives and strengthen the communities of our Ohio neighbors by providing access to affordable housing. I’ve seen firsthand how quality, stable homes can improve individual employability and educational success.

Most affordable housing built today is made possible by the Low-Income Housing Tax Credit (LIHTC), which is designed to encourage investment in and development of affordable housing.

The recently released federal tax-reform framework recognizes the valuable role the LIHTC plays in driving the construction of affordable housing, and the commitment to retaining this incentive in any final tax package is clearly a step in the right direction.

Though, as Washington lawmakers dive into legislative details, we must remain vigilant to ensure policy decisions do not compromise quality housing, jobs and economic development. Even small changes to the U.S. tax code could have a huge impact.

The last time Congress made major tax-code revisions was in 1986, and the apartment industry felt the negative effects for years. This time, we need lawmakers to recognize what’s at stake. We’re concerned that some proposals would curtail or eliminate incentives used to create millions of apartment homes.

In Ohio, the apartmenthousing industry supports more than 203,000 jobs and contributes $20 billion to the state’s economy. This includes the many professionals within apartment communities who work in construction, leasing, property management and maintenance. It also includes jobs in local businesses that apartment-community residents support with their own spending.

The industry is forecast to grow rapidly, and new research shows 4.6 million new units are needed nationwide, with 50,000 units in Ohio by 2030, to meet surging demand. Smart tax policies are necessary to meet the demand for apartments and build prosperous businesses and vibrant communities.

Those of us in the apartment-housing industry support tax-reform efforts that will create jobs and spark economic growth. Change must be carefully considered to aspects of the tax code that have an outsized impact on the multifamily sector. Specifically, tax reform should: Protect flow-through entities; retain the deduction for business interest; maintain like-kind exchanges; ensure depreciation rules avoid harming real estate; preserve capital gains treatment of carried interest; and protect the Low-Income Housing Tax Credit.

As an industry largely comprised of flow-through entities, we support a morecompetitive tax rate and urge lawmakers to ensure all legitimate business income qualifies. We are pleased the framework leaves the decision of business-interest deductibility for flowthrough entities to Congress. Full-interest deductibility for real estate is crucial to developing capital-intensive multifamily buildings.

Congress should enact smart tax policies like these to promote investment, minimize risk, foster entrepreneurship, and protect and create jobs so we can do what we do best: Provide housing and enhance communities that more than 1 million Ohioans call home. We’re counting on Washington to do the right thing, and we want to partner with lawmakers as the process moves ahead.

Ron Burson Vice President Fairfield Homes Inc. Lancaster