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money down the drainThe National Multi Housing Council (NMHC) and the National Apartment Association (NAA) reiterate their calls to protect rental housing as lawmakers work toward enactment of a jobs bill.

The legislative language released by the Obama Administration once again includes a tax increase on carried interest–interest in the capital gain of a partnership when it sells its property, as a revenue raiser.

NMHC/NAA want to remind lawmakers of the devastating effect such a tax increase would have on rental housing.

While this proposal is being marketed as a tax increase on hedge fund managers and other rich Wall Street executives, the truth is that real estate partnerships”and the estimated 550,000 workers employed by the apartment business and the 16 million Americans who rely on our industry to provide them with safe, decent affordable housing”will be very adversely affected by such a change.

Carried interest has been a fundamental part of real estate partnerships for decades. Increasing the taxes on carried interest would not only increase the cost of producing new housing, it would decrease the supply by making many deals financially unworkable.

A carried interest tax increase would have a devastating impact on our rental housing supply at a time when demand is increasing against the backdrop of a supply shortage.

It will also kill jobs and depress income for cities and counties. In recognition of the serious harm this legislation could have beyond Wall Street to main street, in 2010 both the U.S. Conference of Mayors and the National Association of Counties adopted official positions opposing it and urged Congress and the Administration to maintain current law as it relates to real estate partnerships.

The apartment industry supports sound economic policy that helps restore job growth, but a tax increase on carried interest is bad for our economy and bad for our housing supply, noted Cindy Vosper Chetti, NMHC/NAA Senior Vice President for Government Affairs.

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  • Rick

    The title is all wrong. We don’t fear the jobs bill we welcome it. We have lost great tenants who were career firefighters, teachers, firefighters and worst of all peoplple called up for active duty for 3 and sometimes 4 tours of combat. What did you think shared sacrifice meant? Everyone but you has to give? I am a combat vet, 68-69 USMC and 70-72 spec-ops in Laos and Cambodia. Shot 3 times in combat and sole survivour of the helicopter crash that ended my black ops career. We had 3 investors who did not want to carry 3 vets called up for active duty because their enlisted pay did not match their civilian pay. My group of investors bought the paper and we threw them out of the pool of investors I work with. What did it ultimately cost me? 3 selfish men who have no regard for the 1% of our population that fight and die for their freedom. I gained 11 new investors when word spread of what we had done. First my investors always get their rent, I pay it all on the 3rd. After that I file a 3 day notice and collect the late fees, court costs or judgements. My investors always get paid. Right now 1 in 5 Americans are unemployed, 1 in 6 Americans are now living in poverty, 20% of American children are living in poverty. I guarantee my investors so they don’t spend their time counting pennies instead of their blessings. I don’t know who wrote this article but I’m grateful he is not in uniform as fear, doubt and uncertainty like his is bad for moral. Carried intrest for the individual is much different than financing costs for the entity each investor is part. America is at war and if you think only your tenants deserve to send their sons and daughters into harms way so you can fret over your ROI above the welfare of our country, it’s citizens (our tenants) and our economy then I can promise you that you will never be a member of my investors pool not because I dislike you but because of your outlook of America as one nation not a revenue source.

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