Trump corporate tax cuts could cost CA affordable housing $250M

A senior apartment building is under construction at 4200 Geary Blvd on 6th Avenue in the Richmond District, San Francisco. Photo by Junyao Yang on Mar. 14, 2024.

President Donald Trump's proposal to reduce the corporate tax rate from 21% to 15% could significantly impact California's affordable housing sector, potentially diminishing the value of Low-Income Housing Tax Credits (LIHTCs) by approximately 5%, equating to a $250 million loss statewide. This reduction threatens to slow the development of affordable housing projects, as LIHTCs are a crucial financing tool for such initiatives.

Matt Schwartz, President and CEO of the California Housing Partnership and a Class of 2013 San Francisco Fellow with the LeaderSpring Center, highlighted the potential consequences of the proposed tax cuts. He explained that lowering corporate taxes would decrease the incentive for corporations to invest in LIHTCs, thereby reducing the capital available for affordable housing developments. Schwartz emphasized that while the impact wouldn't halt affordable housing production entirely, it would likely slow progress, necessitating increased subsidies from city and state governments to bridge the funding gap.

The California Housing Partnership, under Schwartz's leadership, plays a pivotal role in supporting affordable housing developers across the state. The organization has been instrumental in analyzing the potential impacts of federal tax policies on housing finance and advocating for measures to safeguard and enhance affordable housing resources.

As the debate over corporate tax rates continues, stakeholders in California's housing sector remain concerned about the implications for affordable housing development and the broader goal of addressing the state's housing crisis.

Learn more about California Housing Partnership: https://chpc.net/