The Bulletin: Affordable housing projects are threatened as tax cuts undermine a source of funding

On First Street in Santa Ana, California — not far from where authorities recently cleared a tent encampment along the Santa Ana River near Angel Stadium — developer Caleb Roope wants to build nearly 1,000 apartments that will be affordable for low-income seniors and families. Despite a renewed push from the state to tackle its affordable housing crisis, Roope, chief executive of Pacific Cos., isn’t sure he can break ground on the two subsidized projects. The problem? The federal government. The $1.5-trillion tax cut President Trump signed into law last year slashed corporate tax rates and gave businesses more money to spend how they choose. In doing so, it indirectly cut the value of a crucial tax credit developers rely on to offer homes at rents that lower-­income Americans can afford. As a result, developers such as Roope are receiving less money when they sell those credits, opening up gaping budget holes that are delaying, even killing, their projects. “We had one fall through in Albuquerque, New Mexico. It was 216 units,” Roope said. “We also had another 184-unit project in Phoenix that suffered a similar fate.”