FOR IMMEDIATE RELEASE
Friday, December 8, 2017
Media Contact: Molly Moses
At-Risk Private Activity Bonds Provide Necessary Housing and Grow Ohio's Economy
COLUMBUS - As differences between the tax reform bills are reconciled in the House and Senate, tax-exempt private activity bonds hang in the balance, including potentially 40 percent of Ohio's affordable housing units and the future of the state's economic growth.
Tax-exempt private activity bonds (PABs) were first defined in 1968 by Congress, and their uses have expanded into both multifamily rental production and single-family mortgages. These bonds bolster productivity and economic growth by connecting workers to communities of opportunity. In addition, these PABs support the creation of local jobs and increase the incomes of local workers.
These PABs are more vital than ever to the future of Ohio. Currently, a serious shortage of affordable housing exists in the United States. Last year, OHFA produced 1,700 units, totaling $166 million in private investments generated by the sale of PABs. These housing bonds add affordable housing units and create a public resource that will exist for decades to help families, seniors and other individuals access quality housing.
As housing costs continue to rise, families cannot afford to live near valuable work opportunities, causing slower GDP growth nationwide. Over 47 percent of all renters are cost-burdened, meaning they spend over 30 percent of their income on rent. The lack of affordable housing in major metropolitan areas costs Americans nearly $2 trillion a year in lower wages. Furthermore, by building only 100 affordable rental homes, $11.7 million in local income will be generated, along with $2.2 million in taxes and other revenues for local governments. Furthermore, over 160 local job will be created for working citizens.
However, cities are not the only areas impacted by the lack of affordable housing; in rural America, business leaders cite a lack of affordable housing as a key issue in attracting and retaining a vital workforce. In addition, the affordable housing that is available is often dilapidated, energy-inefficient and still unaffordable for the working class.
Preserving PABs in tax reform legislation is an investment in families across the country, including in Ohio. By preserving and creating affordable housing, we help families climb the economic ladder through access to good schools, high-paying jobs, health care, transportation and more. Research shows that affordable housing is the most cost-effective strategy for reducing childhood poverty in America.
Thus, PABs are not only good for housing; they're good for Ohio's economy and for families and individuals across the state. By investing in housing, we invest in our citizens, their futures and the future of Ohio.