After nearly being eliminated a few months ago during the federal tax reform debate, the New Markets Tax Credit program has proved to be invaluable for rural communities in America. Just in the past year, the Community Development Financial Institutions (CDFI) Fund awarded $3.5 billion in NMTCs, and it plans to award another $3.5 billion in 2018. Overall, since 2003, NMTC investments have created over 1 million jobs in low income areas, and generated more than $156 billion in economic activity.
With this investment from the CDFI fund, rural and low-income communities will receive well-deserved funds to go towards growing operating small businesses and investing in real estate projects. The NMTC has been paying special attention to projects in rural areas in recent years to stimulate growth and improve the well-being of people who live there. The NMTC has also worked hard to attract private investors, rather than public, to increase local income in the long run.
NMTC Awards have also gone towards companies who in turn invest in rural areas. For example, Enterprise Financial CDE has been granted four NMTC awards over the last several years, and with each award it has invested 10-20% in nonmetropolitan areas, both in real estate and mixed-use developments. These awards have been very impactful in the local communities.
Reviving these communities can sometimes be challenging due to lack of investor interest. However, the New Markets Tax Credit has demonstrated its value to the economy, which in turn will incentivize investors to continue investing in rural and low-income communities.