Affordable housing: a new plan

Article Abstract:

The Home Ownership Plan (HOP) is a proposed Federal savings program directed to first time home owners. The employer redirects 4% to 12% of wages that would normally go into the pension plan into the HOP. The employee adds an additional 8% to 10% of gross salary to the plan. The money is invested in a tax-exempt, compound interest earning account. Investors can save enough in seven to 11 years to own the home outright or afford at least a 50% down payment. This program promotes family economic security by encouraging home ownership. The plan will counteract the reduction in home ownership that has existed since 1980. A steady flow of home buyers would help stabilize the volatile housing construction industry. The Treasury would receive a net gain of more than $11 billion annually.

Analysis, House buying, Home buying, Home ownership

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Tax credits: $10 billion for low-income housing

Article Abstract:

A low-income housing tax credit made possible by the Tax Reform Act of 1986 represents a $10 billion, three-year opportunity to increase the availability of low-income housing, but will work only when combined with other forms of available assistance. Many investors are discouraged by restrictions on passive losses. Loss of tax incentives for market rate rental housing has caused at least temporary withdrawal from the market by developers. To achieve success with the credits, it will be necessary to market available tax benefits to those who can use them and set rents in projects below qualifying levels. The development and mortgage banking communities will also need to demonstrate flexibility and accept reduced investment returns.

Economic aspects, Laws, regulations and rules, Low income housing tax credit, Tax credits

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