Washington, D.C. | June 7, 2023 — The New Markets Tax Credit Coalition today released its 2023 New Markets Tax Credit (NMTC) Progress Report, the 19th edition of the report—providing analysis of NMTC activities in 2022.
The report was prepared by the NMTC Coalition, a national membership organization of Community Development Entities (CDEs) and investors organized to advocate for the NMTC. Every year since 2005, the NMTC Coalition surveys CDEs on their work, delivering billions of dollars to businesses, creating jobs, and rejuvenating the parts of the country that have been left behind. The annual NMTC Progress Report presents the findings of the CDE survey and provides policymakers and practitioners with the latest trends and successes of the NMTC.
“The Coalition’s annual survey asks CDEs to report on the deployment of their allocation, investor trends, and a variety of community impact metrics,” said Aisha Benson, NMTC Coalition Board Chair and CEO of the Nonprofit Finance Fund a national CDE based in New York City. “The findings clearly demonstrate the continued improvement and refinement of the program’s efficiency and impact in low-income communities. Two decades after its introduction, the NMTC is no longer simply just a tool for delivering investment. Instead, it has become one of the federal government’s most effective tools for job creation and economic stabilization.”
Report highlights include:
JOBS AND INVESTMENT
Projects generated 52,822 jobs in 2022, including 29,210 permanent full-time-equivalent (FTE) jobs and 23,612 construction jobs. The federal cost per job averaged just over $15,000.
Two hundred ninety-seven projects totaling $6.7 billion received $3.2 billion in NMTC allocation (at a ten-year cost to the federal government of $832 million).
Projects were located in 188 cities located in 40 states and the District of Columbia.
Severe Distress: 83.1 percent of projects were located in severely distressed communities, and 30.5 percent were in non-metropolitan counties.
Fifty-nine percent of projects were in communities of color (minority census tracts). Eight projects (2.7 percent) were in Indian Country or were in majority-Indigenous census tracts.
COMPONENTS OF PROJECTS
Jump-starting American Manufacturing: NMTC financing supported 98 manufacturing and industrial businesses with direct loans and equity investments for working capital, new equipment, or 4.8 million sq. ft. of new or renovated industrial space, including shared, light industrial space for multiple manufacturing businesses.
Real Estate: NMTC financing supported the construction or renovation of 13.7 million square feet (sq. ft.) of real estate and the construction or renovation of 3,054 homes and rental units targeted at low-to-moderate-income households.
STRENGTHENING COMMUNITY ASSETS
Expanding Access to Healthcare: The NMTC healthcare access for 1.2 million individuals through 92 projects and service providers. Those projects included 53 federally qualified health centers, safety-net hospitals, and free clinics.
Expanding Access to Services:
- Fifty-seven percent of projects included at least one community facility, affordable housing, a nonprofit, or social service component. Those new community resources add up to 365 nonprofits, health centers, childcare centers, libraries, community centers, and other community facilities and social service providers.
- Over 60,000 individuals (annually) will receive vocational training, take advantage of expanded college and university facilities, receive financial education, or participate in other adult education or workforce development programs.
- Food banks, pantries, and community food programs financed in 2022 will facilitate an estimated 18.2 million meals to people experiencing food insecurity.
Project Selection Trends:
- In comparison to early in the program (2003-2010), in recent years (2018-2022), NMTC projects are much more likely to support healthcare, manufacturing, co-located social services, food banks, and services for people experiencing homelessness.
This year, 60 CDEs participated in the survey. Their answers were supplemented by data from the Office of the Comptroller of the Currency, Open Corporate, Loopnet, annual reports, and other online materials from NMTC-financed businesses and nonprofits.
“Year after year, the data again shows the NMTC not only delivers an unprecedented level of capital to low-income rural and urban communities, but it also creates much-needed jobs—helping individuals and families thrive and, in turn, grows those local economies where they live and work. In fact, since 2003, the NMTC has created more than one million jobs. After two years of the COVID-19 pandemic, this important incentive for community revitalization is needed now more than ever,” said Coalition spokesperson Bob Rapoza.
The report showcases the importance of the NMTC in providing more than two decades worth of patient, flexible capital to businesses and projects located in distressed rural and urban communities, thereby creating jobs and growing business opportunities. The NMTC financing ranges from traditional industry and community sectors to new and cutting-edge technology. Projects and businesses that benefited from the Credit in the past year include manufacturing, healthcare, schools, and many others supporting childcare, youth, and families.
Rapoza notes, “This report demonstrates that the NMTC is working, and Congress should expand and make the Credit permanent. It has the potential to positively impact communities across the country for years to come.”
About New Markets Tax Credit Program
The New Markets Tax Credit (NMTC) was enacted in 2000 to stimulate private investment and economic growth in low-income urban neighborhoods and rural communities that lack access to the patient capital needed to support and grow businesses, create jobs, and sustain healthy local economies. Since its inception, the NMTC has generated more than one million jobs. Today, due to the NMTC, nearly $120 billion is hard at work in underserved communities in all 50 states, the District of Columbia, and Puerto Rico. For more information, visit www.NMTCCoalition.org.