Photo of Scott Alter “We’ve also used private activity bonds to take market-rate, existing housing and convert it to affordable,” says Alter.

LOS ANGELES—In what appears to be a classic case of unintended consequences, Congressional Republicans may be on the verge of eliminating a key source of funding for affordable housing projects. The first draft of the House’s tax-reform package calls for the elimination of private activity bonds, which are used in connection with 4% Low-Income Housing Tax Credits to build, buy and renovate affordable housing—and thereby make possible much of the affordable housing sector’s activity.