Local view: Tax credits can restore neighborhoodsCreating vibrant, healthy communities takes more than hope and good will. It requires strong public programs that attract investment capital and expertise to neighborhoods that have been long neglected by the private market.
By: Pam Kramer, for the News Tribune
Creating vibrant, healthy communities takes more than hope and good will. It requires strong public programs that attract investment capital and expertise to neighborhoods that have been long neglected by the private market.
You can see the impact of successful efforts in Duluth’s Old Downtown, hillside neighborhoods and Lincoln Park neighborhood. New arts and entertainment facilities, apartments and retail are in areas that long struggled to attract investment. Visit Harbor Highlands or the West Duluth neighborhoods; they are bursting with activity.
Now, walk a little farther: You will see how much still needs to be done. Duluth’s neighborhoods have improved, but many blighted buildings and housing needs remain unaddressed. I see this every day in my work for the Local Initiatives Support Corporation. Over the past 16 years, LISC has invested nearly $76 million in grants, loans and equity to support stronger neighborhoods in Duluth.
Our ability to finish the job we started is at risk. Federal budget pressures, along with uncertainty regarding the future of key tax initiatives, could dismantle the very programs that make possible the new homes, businesses and jobs we helped create.
There are two tax programs in particular that support our work in low-income communities. Together they drive $14 billion in private capital into disadvantaged neighborhoods nationwide each year.
The first is the Low Income Housing Tax Credit. It helps finance almost all affordable rental housing. In Minnesota, it has attracted billions of dollars in private capital to build and preserve 33,600 affordable apartments, including hundreds here in Duluth. But it is nowhere near enough to end our severe shortage of affordable housing.
A new effort in Lincoln Park illustrates what the housing credit can do. It will help a private developer convert the former Lincoln Park School into quality, affordable apartments for low-income families with a range of social services available to residents, including an LISC Financial Opportunity Center to help them improve their financial outlook. It also will offer early-childhood, youth-recreation and educational programs.
The second program is the New Markets Tax Credit, which expired at year’s end and needs congressional reauthorization to continue. It spurs commercial redevelopment in distressed areas where manufacturing has fled and investment dollars are scarce. It has fueled investment in 133 Minnesota businesses and real estate projects, including the Duluth Heritage Sports Center and the massive Clyde Park renewal, a centerpiece of the revival of Lincoln Park. There is no other program like it.
The results? These credits create economic opportunity in neglected neighborhoods. They help ensure residents are safer and have more disposable income, thanks to affordable rents and lower crime rates that follow redevelopment. They help our tax base and are engines of growth.
None of this is easy, and it doesn’t happen quickly. But without these federal programs it won’t happen at all. U.S. Sens. Al Franken and Amy Klobuchar and U.S. Rep. Rick Nolan, all of Minnesota, have stood firm to support these credits and other vital programs. We need their colleagues to follow their sensible lead.
Pam Kramer is executive director of the Local Initiatives Support Corporation’s program in Duluth.