WASHINGTON, DC—The National Multifamily Housing Council and National Apartment Association spelled out the industry's priorities as the so-called “Big 6” group of Congressional leaders and Trump administration officials released their outline for tax reform Wednesday. Among the two associations' main points were the need to protect flow-through entities and the importance of promoting affordable housing.

“We look forward to discussing with Congress our members' key issues in the proposal, and the impact of the package on the apartment industry and its potential to help solve America's housing affordability crisis,” says NMHC and NAA in a statement. “The country needs 4.6 million more apartments by 2030 just to meet demand, and it's critical that tax policy supports the production of that housing.”

In an industry comprised largely of flow-through entities, the two associations support “a more competitive 25% pass-through rate and urge lawmakers to make sure all legitimate business income qualifies. Additionally, the framework's cost recovery rules leave us hopeful a final bill will promote the development of multifamily housing.

“We are particularly pleased the framework leaves the decision regarding the deductibility of interest for pass-through entities to Congress,” according to the NMHC/NAA statement. “Full interest deductibility for all entities involved in real estate is crucial to the development of capital-intensive multifamily buildings.”

The two associations also give plaudits to the Big 6 for acknowledging “the critical role” that the the Low-Income Housing Tax Credit plays in driving construction of affordable housing. “The commitment to retaining this incentive in any final tax package is clearly an initial step in the right direction, and we will work to ensure that tax reform does not inadvertently diminish this valuable tool,” according to the statement.

In common with the National Association of Realtors, the NMHC and NAA stress the importance of retaining 1031 exchanges in any tax reform package. Another must-have, according to the two multifamily industry groups, is preserving the capital gains treatment of carried interest.

“The apartment industry is critically important to communities across the country,” according to the NMHC/NAA statement. “Change must be carefully considered to those specific aspects of the tax code that have an outsized impact on the multifamily sector.”

Instant Insights /

NMHC, NAA: Protect Flow-Throughs, LIHTC in Tax Reform

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