The federal New Markets Tax Credit program (NMTC) is designed to encourage investment in distressed or low-income communities. The New Markets Tax Credit Coalition* recently released its 2016 New Markets Tax Credit Progress Report.
The report’s findings are based on a survey sent by the NMTC Coalition to all Community Development Entities (CDEs) receiving an NMTC allocation. 87 CDEs that have received a total of $26 billion in NMTC allocations since 2003 responded. Survey respondents represented 80% of NMTC program activity in 2016.
For 2016, these CDEs reported:
- $1.8 billion in financing supporting $3 billion in total project costs
- 171 projects – 144 of which involved construction or renovation
- 76% of projects in severely distressed communities
- 22% of projects in non-metropolitan counties
- More than 60% of projects involved a community facility component
Projects receiving funding between 2014 and 2016, according to the report, included:
- Manufacturing: 26.8%
- Healthcare: 14.6%
- Education/youth: 10.6%
- Mixed use: 10.5%
- Incubators/shared space: 6.4%
Perhaps the most noteworthy trend in 2016 NMTC project selection was the increase in the financing of incubators, shared or creative office space, “Makerspaces,” and other physical infrastructure supporting entrepreneurs in the new economy.” (11 projects)
* The New Markets Tax Credit (NMTC) Coalition is a national membership organization that advocates on behalf of the NMTC program. The Coalition, which now includes more than 150 members, is managed by Rapoza Associates, a public interest lobbying, policy analysis and government relations firm located in Washington, DC. Paul Anderson is the principal author of this report.