Blog

Investments in economically distressed rural, urban and minority communities

WASHINGTON, July 15, 2020 — The U.S. Department of the Treasury’s CDFI Fund announced the Calendar Year 2019 New Markets Tax Credit (NMTC) allocation awards today. The CDFI Fund awarded $3.5 billion to 76 Community Development Entities (CDEs) from 30 states and the District of Columbia. Additionally, 15 percent of allocatees are Minority CDEs that received allocations totaling $543 million.

“The federal New Markets Tax Credit is a unique and flexible community development tool with a successful track record, attracting investment capital and boosting economic activity in low-income areas,” said Bob Rapoza, spokesman for the NMTC Coalition. “In fact, the NMTC has leveraged an unprecedented level of investment to low-income communities—generating over $105 billion in total capital investment through public-private partnerships that created more than one million jobs.”

The CDFI Fund indicated 206 CDEs applied for allocations for a total demand of nearly $14.7 billion in credits. With 76 successful applications (37 percent) receiving $3.5 billion, meaning the availability of credits only meets a fraction of the demand. 

Established in 2000 in the Community Renewal Tax Relief Act (P.L.106-554), the New Markets Tax Credit is a bipartisan effort to stimulate investment and economic growth in low-income urban neighborhoods and rural communities. The NMTC provides a shallow federal tax credit of 39 percent, taken over seven years, for investments in census tracts where the individual poverty rate is at least 20 percent or where median family income does not exceed 80 percent of the area median. However, 75 percent of NMTC activity is in the poorest rural and urban communities in America, characterized by poverty of at least 30 percent and unemployment rates 1.5 times that the national average.  More than half of NMTC allocation goes to communities where a majority of residents are people of color. Of the $51 billion in NMTC allocation deployed through 2019, $27.8 billion went to went to majority-minority census tracts, creating 244,000 permanent jobs.

The vast majority of NMTC projects are in areas of extreme economic distress, with a recent independent report commissioned by the CDFI Fund to evaluate the operation and outcomes of the NMTC program found that CDEs are meeting and generally exceeding program requirements.

To date, the NMTC financed about 6,400 projects, including nearly 3,000 community services and facilities, such as hospitals, schools, daycare centers and non-profit service providers – all in areas that weren’t able to provide access to residents before NMTC was invested. As a result, more than 18 million patients have been treated in NMTC-financed healthcare projects, and over 200,000 children participate in youth enrichment programs or receive care in early childhood learning centers.

At the end of 2019, Congress extended the Credit through 2020 at $5 billion in annual credit authority, an increase of almost 40 percent. There is currently bipartisan legislation in Congress aimed at expanding the allocation level and investor base of the NMTC as well as making it permanent. The NMTC Extension Act of 2020, H.R. 1680 in the House and S. 750 in the Senate. There are presently 37 Senators signed on in support of S. 750, which was introduced by Senators Roy Blunt (R-MO) and Ben Cardin (D-MD). H.R. 1680 has 126 cosponsors and is led by Reps. Terri Sewell (D-AL) and Tom Reed (R-NY).

In addition, on July 1, the House passed a proposal to modernize America’s infrastructure, H.R. 2, the Moving Forward Act, which includes a permanent extension and expansion of the New Markets Tax Credit (NMTC) at $5 billion in annual allocation with additional credits totaling $3.5 billion provided over the next three years to help communities combat the economic downturn.  

“The NMTC is a great deal for the federal government, leveraging eight dollars in other investments in communities for every dollar in credits. But, most importantly, the NMTC is a critical tool for our country’s small, overlooked rural towns and blighted urban neighborhoods that have been left outside of the economic mainstream for far too long. One-fifth of the 2019 awards will be made in rural communities, with $708 million in NMTC investments going to revitalize non-metropolitan counties,” said Rapoza.

For examples of how the NMTC is making an impact in each state, see the NMTC Coalition’s NMTC at Work in Communities report or check out its Project Profile Map. The Coalition also released the sixteenth edition of its NMTC Progress Reporton June 30, which documents the NMTC impact in Calendar Year 2019 and features a special section on the 20th anniversary of the NMTC.

About New Markets Tax Credit Program 
the New Markets Tax Credit (NMTC) was enacted in 2000 in an effort 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 NMTC, more than $95 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.

Contact: Ayrianne Parks
[email protected] 
(202) 393-5225

Wednesday, July 15, 2020

AWARDS WILL SPUR ECONOMIC AND COMMUNITY DEVELOPMENT NATIONWIDE (CDFI FUND PRESS RELEASE)

Washington– The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) announced $3,548,485,000 in New Markets Tax Credits today that will spur investment and economic growth in low-income urban and rural communities nationwide. A total of 76 Community Development Entities (CDEs) were awarded tax credit allocations, made through the calendar year (CY) 2019 round of the New Markets Tax Credit Program (NMTC Program).

“Today’s action demonstrates the Administration’s commitment to promoting economic growth and jobs in distressed communities, and to ensuring that every American can get back to work as quickly as possible,” said Treasury Secretary Steven T. Mnuchin.

”For almost 20 years, the New Markets Tax Credit has attracted private capital into businesses and communities as they recover from significant shocks to our economy,” said CDFI Fund Director Jodie Harris. “Projects that spur job creation, enable access to technology infrastructure and develop community facilities like federal qualified health centers, are examples of how New Markets Tax Credit investments are especially critical for low-income communities across the country.”

The 76 CDEs receiving awards today were selected from a pool of 206 applicants that requested an aggregate total of $14.7 billion in tax credit allocation authority. The award recipients are headquartered in 30 different states and the District of Columbia. One-fifth (20%) of the investments will be made in rural communities. It is estimated that these award recipients will make more than $706 million in New Markets Tax Credit investments in non-metropolitan counties.

Today’s announcement brings the total amount awarded through the NMTC Program to $61 billion. Historically, NMTC Program awards have generated $8 of private investment for every $1 invested by the federal government. Through the end of fiscal year 2018, the most recent data available, NMTC Program award recipients deployed nearly $52.5 billion in investments in low-income communities and businesses; with impacts such as the creation or retention of more than 836,000 jobs, and the construction or rehabilitation of more than 218.3 million square feet of commercial real estate.

2019 NMTC Program Award Resources

• Award Book: View award list and learn key facts and statistics about the Allocatees
• Review Process: Learn how the CDFI Fund evaluates Allocation Applications

About the New Markets Tax Credit Program

The New Markets Tax Credit Program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a non-refundable tax credit against federal income taxes for making equity investments in financial intermediaries known as Community Development Entities (CDEs). CDEs that receive the tax credit allocation authority under the program are domestic corporations or partnerships that provide loans, investments, or financial counseling in low-income urban and rural communities. The tax credit provided to the investor totals 39% of the cost of the investment and is claimed over a seven-year period. The CDEs in turn use the capital raised to make investments in low-income communities. CDEs must apply annually to the CDFI Fund to compete for New Markets Tax Credit Program allocation authority. Since the inception of the NMTC Program, the CDFI Fund has completed 16 allocation rounds and has made 1,254 awards totaling $61 billion in tax allocation authority. This includes $3 billion in Recovery Act Awards and $1 billion of special allocation authority used for the recovery and redevelopment of the Gulf Opportunity Zone.

To learn more about the New Markets Tax Credit Program, please view the program Fact Sheet or visit www.cdfifund.gov/nmtc.

About the CDFI Fund

Yesterday, the NMTC Coalition held a virtual conference. Thank you to everyone who attended. The contents of the session – including a video we were unable to show – are available on our YouTube channel (please subscribe!).

NMTC Celebrates 20 Years, Nearly 6,400 Projects Financed and Over One Million Jobs

The New Markets Tax Credit Coalition today released its 2020 New Markets Tax Credit (NMTC) Progress Report, the sixteenth edition of the report—providing analysis of NMTC activities in 2019 as well as a special insert commemorating the 20^th anniversary of the NMTC. An interactive, online toolkit included in the report highlights the nearly 6,400 projects financed by the NMTC since 2000.

The report showcases the importance of the NMTC in providing 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 more 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 supporting childcare, youth, and families.

The report was prepared for the NMTC Coalition, a national membership organization of Community Development Entities (CDEs) and investors organized to advocate on behalf of 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 Yvette Ittu, NMTC Coalition Board President and the President of Cleveland Development Advisors, a CDE in Cleveland, Ohio. “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.”

Sixty-five CDEs participated in the 2020 survey and provided data on their progress raising capital, lending, and investing in 2019 with the NMTC. The survey findings show that competition for credits continues to drive gains in efficiency. The data collected shows that CDEs used $2.7 billion in NMTC allocation in 2019 to finance 288 NMTC projects, amounting to $4.5 billion in total project investment to low-income communities. This financing resulted in the creation of 57,414 total jobs including 35,440 permanent full-time-equivalent jobs and 21,973 construction jobs.

“Year after year, the data 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 over one million jobs. Communities that were already struggling have been hit hard by the COVID-19 pandemic and need this important incentive for community revitalization now more than ever,” said Coalition spokesperson Bob Rapoza.

Across 48 states and territories, CDEs rehabilitated or constructed 15.1 million square feet of space in 2019, thanks to NMTC financing. NMTC financing supported 232 manufacturing and industrial businesses with loans for working capital, new equipment, and 7 million sq. ft. of new space, often through incubators and multi-business facilities, creating over 11,000 manufacturing jobs.

Furthermore, there were 1.7 million people served by NMTC-financed community facilities including 1.1 million patients in healthcare facilities and 116,000 children in childcare, schools, recreational facilities, mentorship programs, and other youth-related social services. Fifty-five percent of mixed-use projects included at least one community facility, nonprofit, or social service component. Those new community resources add up to over 300 nonprofit facilities, health centers, childcare centers, libraries, community centers, and other community facilities. Additionally, 86 percent of projects were in severely distressed communities. 

The report profiles NMTC financed businesses, including a women’s and children’s center in Baltimore, MD, a non-profit office space and community food center in Denton, TX, and a teen center in Belle Grande, FL, and it describes the impact of the NMTC in native communities in 2019.

Rapoza notes, “The authorization for the NMTC is set to expire yet again as the end of this year. This report is further proof that the Credit is working and Congress should expand and make the NMTC permanent.”

There is currently bipartisan legislation in Congress aimed expanding the allocation level and investor base of the NMTC as well as making it permanent. The NMTC Extension Act of 2020, H.R. 1680 in the House and S. 750 in the Senate. There are presently 37 Senators signed on in support of S. 750, which was introduced by Senators Roy Blunt (R-MO) and Ben Cardin (D-MD). H.R. 1680 has 126 cosponsors and is led by Reps. Terri Sewell (D-AL) and Tom Reed (R-NY).

In addition, the House is debating on the floor this week a proposal to modernize America’s infrastructure, H.R. 2, the Moving Forward Act, which includes a permanent extension and expansion of the New Markets Tax Credit (NMTC) at $5 billion in annual allocation with additional Credits provided over the next three years to help communities combat the economic downturn.  

About New Markets Tax Credit Program 
the New Markets Tax Credit (NMTC) was enacted in 2000 in an effort 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 NMTC, more than $95 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.

Contact: Ayrianne Parks
[email protected] 
(202) 393-5225

More than 700 businesses, investors and organizations call on Congress to extend and expand the community and economic development tax credit assisting communities hardest hit by COVID-19

WASHINGTON, June 24, 2020 – Today, the New Markets Tax Credit (NMTC) Coalition sent a letter addressed to Congressional leadership and Members of the 116^th Congress urging them to take action to extend and provide an emergency expansion of the New Markets Tax Credit (NMTC) that will assist communities struggling with high poverty and unemployment due to the coronavirus pandemic – many of which also faced severe challenges in securing capital that pre-dated the pandemic.

The letter comes on the heels of the House proposal to modernize America’s infrastructure, H.R. 2, the Moving Forward Act, which includes a permanent extension and expansion of the New Markets Tax Credit (NMTC) at $5 billion in annual allocation with additional Credits provided over the next three years to help communities combat the economic downturn.  

More than 700 signatures came from banks and credit unions; nonprofits such as Habitat for Humanity chapters, YMCAs, Boys & Girls Clubs, food banks and heath care clinics; businesses, ranging from very large businesses to small, family-owned operations; city governments; state and local elected officials and agencies; and associations that represent thousands of members.

Beyond a permanent extension of the NMTC, the letter urges Congress to provide additional emergency NMTC allocations of $3.5 billion phased in over three years. The letter also calls on Congress to take steps to ensure more capital reaches businesses, nonprofits and revitalization projects by expanding the pool of eligible NMTC investors to allow more individuals to participate and by adopting temporary policies that enhance the liquidity of investors.

“Even before the COVID-19 pandemic hit, many of America’s urban neighborhoods and rural communities, struggling with high rates of poverty and unemployment, faced the loss of access to billions of dollars for high-impact, community revitalization projects,” said Bob Rapoza, spokesperson for the NMTC Coalition. “The New Markets Tax Credit provides assistance that no other federal tax incentive can to economically distressed rural and urban communities to promote economic revitalization. The NMTC provisions in HR 2 are a good first step. We urge Congress to take action now to ensure this important incentive is available for community revitalization that is needed now more than ever.” 

Established in 2000 in the Community Renewal Tax Relief Act (P.L.106-554), the NMTC is a bipartisan effort to stimulate investment and economic growth in low-income urban neighborhoods and rural communities. The Credit was most recently provided a one-year extension at the close of 2019, as well as a $1.5 billion increase in allocation. The NMTC, which is set to expire at the end of 2020 without congressional action, has an exemplary track record in driving investment to some of the poorest communities in our country, financing over 6,000 businesses, hospitals, daycare facilities and manufacturing expansions and creating more than one million jobs.

The NMTC works by providing a shallow federal tax credit of 39 percent, taken over seven years, for investments made in census tracts where the individual poverty rate is at least 20 percent or where median family income does not exceed 80 percent of the area median. In 2019, more than 80 percent of all NMTC investments were in communities exhibiting severe economic distress with extremely low-incomes, high unemployment, or high poverty.

For examples of how the NMTC is making an impact in each state, see the NMTC Coalition’s NMTC at Work in Communities report or check out its Project Profile Map.

Contact: Ayrianne Parks
[email protected] 
(202) 393-5225

More than half of New Markets Tax Credit projects expand access to healthcare, social services, childcare, job training, nonprofits, and social service providers working to lift people out of poverty. Federal resources for community development have been cut by more than 80 percent since 1980, and communities increasingly count on the NMTC to support new and improved services for their most vulnerable populations.

Some recent examples:

Ferguson Empowerment Center

Michael McMillan, president and CEO of the Urban League’s St. Louis chapter, said the location was critical. “It was extremely important–just as important symbolically as it was programmatically,” he said. “It was the first building burned and was on the national news.”

Profile: Journal of Tax Credits…

Ferguson Community Empowerment Center Now Open

A burned-out convenience store that was the epicenter of 2014 racial protests and riots in Ferguson, Mo., became a community-focused “empowerment center,” thanks to the work of community leaders and financial support from the new markets tax credit .

A New Community Center

The Community Center at Ferguson offers a variety of basic social services such as emergency financial, utility, and rent/mortgage assistance. Case managers provide casework and referral services, including financial planning assistance, job placement strategies, and emotional support in cases of abuse or crisis. Families are referred to as the Pathway of Hope program when the crises or barrier requires more long-term support.

Spark Academy

Spark Academy is a free 8-week program that gives third and fourth-grade students an opportunity to discover their gifts and talents in a safe place after school Monday through Thursday. Spark encourages each participant to discover their gift and can build a solid foundation to grow.

The Believe Project

The Believe Project, a partnership with the St. Louis Black Authors of Children’s Literature, is a new literacy library created to be a safe space for children to enjoy the beauty of reading and will be featured at The Salvation Army Ferguson Community Empowerment Center through the Spark Academy and Ignite programs. The project’s vision is to ensure that “all children become confident and competent readers by the end of third grade” – focusing especially on books written by black authors and/or for black children’s audiences.

Federally Qualified Health Centers

NMTC-financing made nearly 400 FQHCs possible, expanding healthcare access for millions of low-income people.

Los Barrios Unidos Community Clinic

Community, FQHCs, Healthcare

Project Year:

2015

In late 2014, Los Barrios Unidos, an FQHC, secured NMTC financing for its new Family Health Center, a new 21,400 square foot clinic offering 15 exam rooms, 3 open Team ...
Read More

Northside Community Health Center

Community, FQHCs, Healthcare

Project Year:

2017

From its founding in 2002 by a group of area residents, faith-based groups, and health and social services providers, North Texas Area Community Health Centers (NTACHC) grew to provide care ...
Read More

Jessie Trice Community Health System

Community, FQHCs, Healthcare

Project Year:

2019

Jessie Trice Health Systems has served the Miami area since 1967 with healthcare from its FQHC (Federally Qualified Health Center) locations, currently providing services for over 45,000 patients. With NMTC ...
Read More

CityLink Center

Community, Community Center, FQHCs, Healthcare

Project Year:

2012

On November 13th, Cincinnati leaders gathered for the grand opening of the CityLink Center, a comprehensive social services mall which was built with the help of New Markets Tax Credits ...
Read More

• 1
• 2
• 3
• ›

Food Banks and Emergency Services Providers

The NMTC has financed nearly 200 homeless shelters and community food pantries.

North Texas Food Bank

Community, Food Banks

Project Year:

2017

Originally posted at Crescent Growth Capital Established in 1982 by Jo Curtis, Ambassador Kathryn Hall, Lorraine Griffin Kircher and Liz Minyard, the North Texas Food Bank (“NTFB”) addresses the critical ...
Read More

Metropolitan Ministries, Phase Two

Community, Food Banks, Homeless Shelters

Project Year:

2014

Metropolitan Ministries has served homeless and needy populations in the Tampa Bay area for over 40 years. Phase One used NMTC to build a new homeless services and housing facility ...
Read More

Public Action to Deliver Shelter

Community, Homeless Shelters

Project Year:

2018

Awarded $100,000, Hesed House is a 501c(3) under the Public Action to Deliver Shelter (PADS) program dedicated to alleviating the plight of poor and homeless persons. Its mission is to ...
Read More

Meals on Wheels Kitchen

Community, Food Banks

Project Year:

2018

Meals on Wheels San Francisco (MOWSF) plans on making sure no homebound senior in the City goes hungry. The nonprofit has begun construction on a $41.5 million state-of-the-art industrial kitchen ...
Read More

• 1
• 2
• 3
• …
• 11
• ›

Yesterday, the Joint Committee on Taxation released “OVERVIEW OF SELECTED PROVISIONS AND OPTIONS RELATING TO FUNDING AND FINANCING INFRASTRUCTURE INVESTMENTS.” The report highlights tax provisions employed for the financing of infrastructure. With the help of CDFI Fund data, the committee was able to identify 171 infrastructure projects financed by the NMTC totaling over $2 billion.

Below, we’ve highlighed a few examples.

Ports and Freight

Industrial waterfront property and long-neglected ports are often the most distressed and environmentally contaminated areas of an urban core. Municipal governments and Port Authorities have used the NMTC for brownfield remediation and to rejuvenate ports, freight terminals, and fishing docks.

Port of Hueneme

Infrastructure, Ports, Transportation and Ports

Project City:

Port Hueneme

Project State:

CA

Project Year:

2013

The modernization of the Port of Hueneme retained $7 billion in trade business and 500 livable wage jobs. Clearinghouse CDFI provided $10 million of NMTC allocation for this $14.7 million ...
Read More

America’s Central Port Complex

Infrastructure, Manufacturing, Ports, Transportation and Ports

Project City:

Madison

Project State:

IL

Project Year:

2015

The project includes million square feet of new, rail-served manufacturing and warehousing space in the industrial development along the Mississippi River’s Chain of Rocks shipping canal. The warehouse project is ...
Read More

Eagle Railcar Services

Historic Rehabilitation, Infrastructure, Ports, Transportation and Ports

Project City:

Washington

Project State:

IN

Project Year:

2017

Eagle Railcar Services acquired, remediated and renovated the former B&O Railroad Servicing facility, with 10 miles of track and 200,000 square feet of buildings located in rural Washington, Indiana (pop, ...
Read More

• 1
• 2
• 3
• ›

Broadband

Many rural communities still lack access to high-speed broadband connections. Increasingly, the NMTC has been used to finance broadband expansions into underserved and remote rural areas.

Terra NW

Broadband, Community, Infrastructure

Project City:

Anchorage

Project State:

AK

Project Year:

2011

Installation & Operation of Fiber-Optic & Microwave Broadband Connection: GCI is the largest integrated telecom company in Alaska, having provided cellular service to over 100 rural communities in the past ...
Read More

Greatwave Communications

Broadband, Infrastructure

Project City:

Cleveland

Project State:

OH

Project Year:

2016

GreatWave Communications is a long-standing operating business located in Conneaut, Ohio that provides high-quality telecommunications services to over 2,000 telephone customers, 1,650 cable television subscribers, and 3,200 broadband internet users ...
Read More

Continental Divide Electric Cooperative Broadband Project

Broadband, Infrastructure

Project City:

Grants

Project State:

NM

Project Year:

2017

Currently, residents and owners of approximately 24,000 homes and business in Grants and the surrounding area have no broadband internet option and rely on satellite internet, the speed of which ...
Read More