DIALOGUE 3: CREATE APPROPRIATE FINANCE PRODUCTS

The Challenge:

Financial products are restrictive, for example by not fully accounting for people’s assets, such as incomes of multiple people living in a dwelling, or for hidden costs and impacts, such as the future value of modified assets. 

The Principle:

We shall pursue the expansion of existing, and the development of new, financial models and products to facilitate investment in housing stock and communities that enable independence over the lifespan and view lifelong, multigenerational living environments as an asset.

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Resources

Phillips, S. (2020). The Affordable City: Strategies for Putting Housing Within Reach (and Keeping it There). United Kingdom: Island Press.

The author believes that effectively tackling the housing crisis requires that cities support both tenant protections and housing abundance. This book offers policy recommendations, beginning with a set of principles and general recommendations that should apply to all housing policies.  

Rolnik, R. (2019). Urban Warfare: Housing Under the Empire of Finance. United Kingdom: Verso.

This book discusses how the financialization of housing has left millions homeless and in financial desperation across the world.

Paying for Enabling and Equitable Housing

In this AARP Thinking Policy blog by Stephanie Firestone addresses the issues discussed with experts during our third Equity by Design dialogue: how to make this housing affordable and how to finance its development. 

What is the New Markets Tax Credit and how does it work?

The credit provides an incentive for investment in low-income communities. The US Department of the Treasury competitively allocates tax credit authority to intermediaries that select investment projects. Investors receive a tax credit against their federal income tax.

New Markets Tax Credit

The NMTC Program incentivizes community development and economic growth through the use of tax credits that attract private investment to distressed communities.

Low Income Housing Tax Credit

The Low-Income Housing Tax Credit (LIHTC) program is the most important resource for creating affordable housing in the United States today. Created by the Tax Reform Act of 1986, the LIHTC program gives State and local LIHTC-allocating agencies the equivalent of approximately $8 billion in annual budget authority to issue tax credits for the acquisition, rehabilitation, or new construction of rental housing targeted to lower-income households. An average of almost 1,400 projects and 106,400 units were placed in service annually between 1995 to 2018.

National Housing Law Project

 The National Housing Law Projects mission is to advance housing justice for poor people and communities.  We achieve this by strengthening and enforcing the rights of tenants, increasing housing opportunities for underserved communities, and preserving and expanding the nations supply of safe and affordable homes. They do this work through Advocacy + Litigation, Technical Assistance + Resources, Presentations + Trainings, and Initiatives. NHLPs Resource Center provides background materials on the federal housing programs and federal housing laws.  

The Urban Institute’s Housing Policy Finance Center

They connect capital markets and housing markets and provide timely, impartial data and analysis on housing finance; show how the housing finance system affects households, communities, and the broader economy; and contribute to sound public policy, efficient markets, and economic opportunity.

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For more information about AARP's Equity by Design work, contact: 
Stephanie K. Firestone
, Senior Strategic Policy Advisor for Health and Age-Friendly Communites, AARP International. 

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