The City Council is on the verge of approving a package of housing tax credits. Community Vision for Takoma welcomes new housing in our city that does not displace vulnerable residents and that is developed in ways that protect the environment, as the Council’s 2019 housing strategic plan wisely requires. We welcome new neighbors. We also strongly support incentives to preserve affordable housing and to renovate our deeply affordable–but aging–rental housing stock.
However, we’re deeply concerned about the proposal to provide large, long-term tax subsidies for developers of market-rate multifamily rental housing. Given the major changes in Takoma Park’s real estate market due to both the enactment of the Minor Master Plan Amendment, which upzoned the center of the city to promote development, and the availability of a major, attractive site for development at the former Adventist hospital, we are not persuaded that tax subsidies are necessary to stimulate market-rate housing.
The City can ill afford to give away future tax revenues to for-profit developers. We face a serious structural deficit in our City budget that may require painful choices about cutting City services or raising our already-high taxes. CVT believes that it would be fiscally irresponsible to provide tax credits for market-rate rental housing that seems likely to be built anyway, given how popular Takoma Park has become as a housing destination. Trying to compete for developers’ attention by being among the first jurisdictions to offer a big tax break for market-rate housing is not a policy experiment worth putting the City’s shaky finances at further risk.
For these reasons, CVT opposes adoption of the market-rate housing tax credit. We do strongly support tax credits to preserve affordable housing, which is so valuable to our community, and to rehabilitate the City’s aging apartment buildings to ensure quality housing for residents. We urge the City Council to strengthen those two proposals.