For various reasons it is not possible to use the Low Income
Housing Tax Credit to attract investment capital for small (5 to 50
unit) multifamily projects. Bank equity investments could
stimulate the production of an increased number of rental units.
In addition, banks (or bank-owned CDCs) should make equity investments in commercial development projects that are sponsored by community based developers (possibly taking advantage of the New Markets Tax Credit" program..
These are the underlying reason for the almost total lack of investment in many of these communities. Thus, it is not realistic to look to "potential profits" as a source of funding to cover the administrative costs of nonprofit community based developers.
This type of support will increased flow of "bankable" real estate development venturers.
By using these types of bonds qualified projects can avoid having to
pay ad valoremreal estate taxes. The savings could be used to produce a
return on investment
for the investors in an otherwise unfeasible project. It is estimated
that a $20 million investment could leverage $100 million on in project