Dear Mercy Housing Supporter,
Every time I sit down to write about the housing situation in our state and nation, I feel like I’m describing a scene in a Dickens novel. We have hit such a critical point in California with homelessness and housing insecurity that our work is on nearly everyone’s minds. That concern drew over 400 supporters to attend Mercy Housing California’s recent fundraising gala. The desire to change our trajectory has also led voters and elected officials to approve over $5 billion in funding for affordable housing and homelessness in California last November and this March. In an era of significant cynicism and political logjams, we are lucky to have such effective advocacy groups, a thoughtful electorate, and many responsible journalists that have aimed at educating the public rather than demonizing the homeless.
Back in Washington, D.C., the President’s first budget proposal, released in March, would cut $6.2 billion in funding from HUD as part of a huge proposed drop in domestic spending to pay for a $54 billion increase in military spending. The cut would basically zero out all federal appropriations for housing development, leaving only the Low Income Housing Tax Credit (LIHTC) as a tool for new construction of affordable housing. Many of the other programs that our residents rely upon, such as Head Start, are also slated for major cuts.
Thankfully, there appears to be strong bipartisan support for the Low Income Housing Tax Credit, which provides between one-third and one-half of the funding for housing development in California and nationally. Due to years of meeting with elected officials and site tours, many Republicans and Democrats have committed to safeguard the LIHTC in the upcoming negotiations over tax reform. However, while there is not likely to be a direct attack on the LIHTC, changes in the corporate tax rate could greatly diminish its buying power. In fact, the price investors pay for these credits dropped by 15% immediately after the November election as investors assumed that a major cut in the corporate tax rate would reduce the value of the credit. Work is underway in the Capitol to avoid that unintended outcome and we are thankful to have supporters on both sides of the aisle.
Which leads me to my final thoughts. At the risk of sounding like a Pollyanna, I truly believe Mercy Housing’s work is a local and national imperative that cannot afford to be treated as a partisan issue. The best thing we can do to build that reality is assume that our friends and neighbors would support this work if they only knew more about it. We were thankful that so many of you took that opportunity to invite your friends and business colleagues to the Gala. As you get news of building openings and other events, please take a moment to invite someone you know to take a look at what we’re doing.
Thank you for your support,
President, Mercy Housing California