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Cutting Taxes Shouldn't Cut Opportunities for the Apartment Industry

Tax Reform
June 2017

Tax Reform: In Washington, D.C., these two simple words can cause the eyes of the wonkiest of policy wonks to glaze over. And yet, as the Trump admin­istration and the Republican-led Congress begin the 
long process of attempting to overhaul the U.S. tax code, these words can also have a profound impact on the apartment housing industry nationwide for years to come. 

Though the legislative details are far from settled, this complex and ever-changing policy initiative has the potential to significantly affect our industry’s ability to provide the homes, jobs and economic contributions that are so crucial to communities, families and individuals across the country. Policymakers in Washington need to understand that tax reform must enable investment, encourage entrepreneurship, protect and create jobs and foster the development of afford­able, livable communities. 

“I worry that when Americans hear ‘tax reform,’ they either focus on one or two specific tax provisions that affect their personal situation, or they tune out because it’s so com­plex,” said NAA President & CEO Robert Pinnegar, CAE. “Most NAA members understand how eliminating the deduction for business interest, for example, would impact their businesses. But members of Congress don’t necessarily understand that without it, there could be a steep drop in the construction of new apartments. This would mean less available housing at a time when demand is growing, leading to weaker community development, fewer jobs, less security for families and so on.” 

Apartment housing developers assume considerable financial risks. To offset those risks, the industry has several investing and tax tools that encourage innovation and entre­preneurship: Flow-through entities, section 1031 “like-kind” exchanges, deductions for business interest and depreciation, the Low-Income Housing Tax Credit and carried interest. These tools are more than devices for investors and businesses; they are the vehicles that support livelihoods, job security, affordable housing and meeting the demand for more housing options.

To ensure that lawmakers get the full tax reform picture, NAA is advocating for smart tax policy that promotes economic growth, job creation and investment in our neighborhoods and communities without unfairly burdening owners, operators and developers who pay taxes when they build, operate, sell or transfer communities to their heirs. To that end, NAA just launched “Protect the Lease,” a multifaceted public affairs campaign designed to ensure lawmakers understand what’s at stake for the apartment housing industry. 

Protect the Lease will enable all corners of our industry to share their stories with lawmakers in a coordinated, strategic way. We will use our strength in numbers, harnessing the power of the many voices and faces of the apartment industry to ensure that Congress and the White House see, read and hear from the tens of thousands of people who matter – YOU. 

Protect the Lease will present lawmakers with specific, personalized examples of the implications of policy changes supported by hard data and proven facts. Central to this effort will be tools that will enable you to tell your story directly to lawmakers. The campaign website, ProtecttheLease.com encourages you to share how and why specific tax reform provisions matter to you, your business and your community. We are also producing videos and visual materials such as social media posts and advertisements to make the case for the right policies to ensure a strong apartment industry. 

Apartment housing often is the glue that binds communities – generating jobs, attracting businesses and providing secure, affordable homes for residents of all types. Let’s make sure tax reform doesn’t eliminate or hamper the very benefits that enable our industry to prosper and grow. Join us in telling Congress and the Administration to Protect the Lease

Support Smart Tax Policy to Protect Housing’s Future 

  • Like-kind exchanges to create and secure jobs
  • Flow-through entities to protect livelihoods across America 
  • Deduction for business interest to invest in communities 
  • Low-income housing tax credit to ensure affordable housing 
  • Depreciation rules to meet housing demand 
  • Carried interest to continue investing in the industry 

Learn More in Atlanta 

NAA’s Government Affairs team has relocated from Washington D.C. to Atlanta with an interactive, mobile headquarters at the 2017 NAA Education Conference & Exposition

Find out how the new administration and Congress’ plans for tax reform will affect your job and industry. Talk about the issues with your NAA team and then share your story about why apartments matter to you. Located on the third-floor Concourse, the #ProtectTheLease kiosk will offer a state-of-the-art video booth for you to share your story. Create a one-minute video and post it to Facebook. Send your Congressman a message about why apartments work for you. Join the movement and let your voice be heard!