By Katy Hartnett, Director of Government Affairs & Outreach; Smart Growth America
The federal government spends approximately $450 billion each year on real estate. How does this funding impact American families? Is it supporting U.S. communities? And are taxpayers getting the best return on their investment?
A report released yesterday by Smart Growth America calls for an answer to these questions. Federal Involvement in Real Estate: A Call To Action surveys 50 federal real estate programs to better understand where this money goes and how it influences development in the United States. The spending examined in the report’s analysis includes tax expenditures, loan guarantees, and low-interest loans and grants – totaling $2.23 billion in federal spending and commitments over the five year study period.
This involvement has an enormous impact on the U.S. real estate market, and even a cursory analysis reveals this impact is uneven. For example, the report finds that small multifamily buildings are less likely to receive financing, despite the fact that most renters in the United States live in these smaller buildings.
Outdated programs and lack of coordination across agencies contribute to this imbalance, the report explains. As a result, many federal programs are not targeted toward those most in need or toward strengthening existing communities or places where economic opportunities are available.
Of the programs surveyed, the Low-Income Housing Tax Credit (LIHTC) was recognized as one of the more successful programs toward achieving its original goal. “LIHTC is one of the programs that is both working well and achieving its intended goals,” Smart Growth America President and CEO Geoff Anderson said on a conference call. LIHTC is the nation’s largest affordable rental housing production program, and since its creation in 1986 it has leveraged more than $75 billion in private investment capital and provided critical financing for the development of more than 2.5 million affordable rental homes.
Smart Growth America’s report urges policymakers to review
federal real estate programs to better achieve four national goals: (1) Support
balanced housing choices; (2) Reinvest in existing neighborhoods; (3) Provide a
safety net for American families; and (4) Help more Americans reach the middle
Join the national call for reform and ask Congress to examine federal real estate spending. Federal investments in real estate could be helping communities grow stronger and more vibrant — in addition to achieving their goals of security and stability. Sign the petition to urge Congress to make this examination a national priority.
With the Presidential Inauguration around the corner and a new Congress beginning its work, now is the time for policymakers to re-examine federal commitments to the real estate market. Visit www.smartgrowthamerica.org to learn more and download a full copy of the report.