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HOUSING TAX CREDIT MADE PERMANENT; HOUSE And SENATE APPROVE COMPROMISE DEFICIT REDUCTION PACKAGE

 WASHINGTON, Aug. 6 /PRNewswire/ -- In a victory for community renewal initiatives across the country, the U.S Senate today approved the compromise deficit reduction package that includes a permanent Low Income Housing Tax Credit and an expanded Earned Income Tax Credit.
 The House of Representatives passed the measure Thursday.
 "This is a great day for struggling communities working to break free from the binds of poverty, to replace despair with hope and to create opportunity where before lay only shattered dreams," said Paul S. Grogan, president of the Local Initiatives Support Corporation (LISC), the nation's largest community development support organization.
 "A special thanks must go to Congressmen Dan Rostenkowski and Charles Rangel and Senate Majority Leader George Mitchell, whose leadership was crucial in making the Tax Credit a permanent feature of the U.S. tax code and who have demonstrated a real commitment to struggling communities nationwide," Grogan added.
 "With permanent extension of the Tax Credit, an important constraint on corporate support and on community access to private, philanthropic and public resources has been removed and community leaders can continue their fight against neglect and despair with renewed vigor."
 Since its enactment in 1986, and with the dwindling of federal housing resources over the past 12 years, the Tax Credit has become the principal tool for affordable housing production in the country. It has produced more than 500,000 units of affordable rental housing since its enactment and is responsible for producing 125,000 units per year.
 The National Equity Fund (NEF), created by LISC in 1987 to take advantage of the Tax Credit to channel corporate investment into affordable housing development, has used the Tax Credit to raise more than $625 million from U.S. corporations to support the creation of more than 14,000 units of affordable housing.
 "Corporate support to date has been impressive," NEF President Doug Guthrie said. "However, the impermanence of the Tax Credit had placed a significant constraint on that support. Corporations have been reticent to make significant long-term commitments because of the tenuousness of the Tax Credit, which had several temporary extensions before it expired a year ago.
 "With this vote making the Tax Credit a permanent feature of the U.S. tax code, that uncertainty has been removed and the corporate support that has been key in the rejuvenation of such communities as the South Bronx, Miami's Liberty City and Chicago's South Side can continue and expand," Guthrie said.
 The Tax Credit is a highly targeted federal tax incentive only for affordable rental housing development to be occupied by tenants earning less than 60 percent of the median income of the area where the development is located. It offers investors credit against federal income taxes based on the cost of acquiring, rehabilitating or constructing low-income housing.
 Although permanent extension of the Tax Credit has had broad bipartisan support in the U.S. Congress for several years, it was never able to secure a permanent extension. Today's vote, and the expected signing of the bill by President Clinton, culminates a long battle by community, corporate and philanthropic leaders to ensure critically- needed resources will continue to be available in the fight against poverty.
 Where the Tax Credit will expand the amount of resources available in communities, the Earned Income Tax Credit will enable struggling families to retain a greater share of their income.
 "These two elements are crucial tools in the struggle against poverty and urban neglect," Grogan said. "With the action this week by the Congress, we can open a new phase in the community development movement that is the exciting agent of change in poor neighborhoods across the nation."
 -0- 8/6/93
 /CONTACT: Marilyn Katz of LISC/NEF, 312-944-5706/


CO: Local Initiatives Support Corporation; The National Equity Fund ST: District of Columbia IN: SU:

LD-TM -- NY063 -- 0511 08/06/93 22:18 EDT
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Publication:PR Newswire
Date:Aug 6, 1993
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