It is no secret that in recent years the political divide between left and right has widened. In today’s highly politicized environment, legislation and politics are often mired in political drama or watered down (or inflated) to get just enough votes to pass. The result can lead to bad policy in some cases, and no policy in others.
In an age when many seem to pledge allegiance to Fox News or CNN, incentives for community and economic development are a key issue that transcends and unifies party lines. With program expansions on the table at the local and federal levels, it is more important than ever to foster this seemingly rare consensus.
From President Obama’s Zones of Promise to President Trump’s Zones of Opportunity, these programs and policies are historically bipartisan and effective in achieving their goals, but without the fanfare of many other better-known government programs. Those who are not in the world of real estate or economic development probably don’t often think about the impact of community development finance on their communities. Look at the skyline and you’ll see that a significant portion of Milwaukee’s redevelopment was built with the help of federal, state, and local development incentives.
From the office tower of The Couture and Northwestern Mutual, to the Fortress Building and the Fiserv Forum (to name a few) – many of Milwaukee’s most prized landmarks would not have seen the light of day without the incentives. Development.
Putting together a set of development incentives, traditional equity and debt, or a âcapital stackâ, to make a project feasible is complex. Whether it’s historic tax credits, new market tax credits, low income housing tax credits, brownfield subsidies, clean energy financing assessed by ownership, tax-exempt bonds and / or TIF, incentives exist at the local, state, and federal levels and can be carefully designed to be used together to encourage a developer to undertake what might otherwise be a financially unfeasible project .
When one thinks of bringing together a financial package to make a beneficial project a reality, a recent project comes to mind: the Eagleknit development of Wangard Partners. The $ 30 million conversion of a historic Walker’s Point industrial building into a 107,000 square foot office and innovation center will activate an otherwise stagnant block of Milwaukee and, hopefully, attract turmoil and investment additional. The development was made possible through a complex financial package that included New Market Tax Credits, Historic State Tax Credits, Opportunity Zone Funds and Clean Energy Funding Assessed by ownership in addition to conventional financing. Together, these funding options made the project possible, resulting in an increase in the City’s tax base and the creation of new jobs.
Eagleknit is one example of Milwaukee’s long list of redevelopment projects that have leveraged development incentives to fuel the resurgence of areas such as Third Ward and Walker’s Point, bringing back the urban core of Milwaukee. With the expected expansion of major incentive programs, including tax credits for low-income housing and tax credits for new markets, the months and years ahead could show even larger investments. in and redevelopment of neighborhoods and trade corridors in Milwaukee.
Since 1986, the federal low-income housing tax credit program has mobilized private capital to finance affordable, high-quality rental housing. According to the Wisconsin Housing and Economic Development Authority (WHEDA), the sole administrator of federal housing tax credits in Wisconsin, more than $ 445 million has been awarded for the development and rehabilitation of more than 53,000 housing units. rental housing since the inception of the program. In April, a bipartisan group in Congress introduced the Affordable Housing Credit Improvement Act (AHCIA) of 2021 aimed at addressing the affordable housing shortage in the country through the expansion of the housing tax credit program. low income housing.
The AHCIA’s passage would build on the Consolidated Appropriations Act of 2021, which was passed by Congress in December 2020. The bill included an annual five-year, $ 25 billion extension of tax credits. for new markets, which encourage growth and investment in low-income sectors. income communities. According to the US Department of the Treasury, for every dollar invested by the federal government, the new business tax credit program generates more than $ 8 in private investment. In addition, since 2003, the program has created or retained more than 830,000 jobs.
These bills – and the investments they encouraged – were a beacon of hope in what was otherwise partisan politics. Our hope is that these and other economic development programs like them will continue to be valued and promoted on both sides of the aisle. Our communities will be better off for it.