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AIA Report: Revamping Tax Code Key to Making Livable Communities A Bigger Reality Print E-mail
Wednesday, 19 May 2010 06:45

"The challenge to making livable communities a reality lies in convincing policy makers to revamp a complex tax code that encourages sprawl and traffic congestion at the expense of “walkable,” mixed-use development and mass transit."

That is the primary conclusion of a report issued Monday by the American Institute of Architects and partnering organizations at the Transit-Oriented Development (TOD) Financing Forum, which will bring together national housing, development, public and private finance, transportation practitioners and policy leaders to discuss the complexities of financing TOD. The forum is being held at the U.S. Capitol Visitor Center and will also highlight the opportunity for federal transportation reform and encourage connections and linkages for accelerating the development of TOD.

“Unfortunately, the tax credits and federal financing tools that affect the built environment do so in ways that frequently conflict with livability principles,” the report states. “On balance, federal policy is much more consistent with single-use development that is characteristic of sprawl at the edges of our communities.”
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The report details the billions of dollars in tax credits and incentives available to encourage green building construction. However, this tax policy in large part is applied without any appreciation of the location of these buildings. As a result, the tax code has opened the floodgates to sprawl. One example cited by the report is the depreciation deduction, which applies only to new construction. Because of this limitation, new construction is encouraged on new land at the expense of renovating historic properties on existing property. And, this new construction has little incentive to be designed to last significantly longer than the depreciation period.

"This study offers simple, common sense steps for turning our complicated tax code into a tool for unleashing green construction," said Rep. Earl (D-Ore.), a member of the House Ways and Means Committee. "Green buildings aren't green if it takes an hour to get to them and makes traffic congestion worse. We can improve quality of life and reduce money spent on gas and electricity by using the tax code to offer incentives for buildings that are accessible and reduce sprawl. Nobody understands this better than architects, and I commend them for this relevant and timely study."

The report proposes four recommendations that will enable the federal government to recalibrate the Internal Revenue Code and create models for livable communities that can define the next generation of American growth and development:

- Adopt a consistent, and consensus-based definition for livable communities and high-quality development projects
- Amend existing provisions in the Internal Revenue Code to promote livability
- Partner with States and Communities to develop special livability tax districts
- Adopt consensus-based standards to ensure housing affordability within livable communities

The forum is co-sponsored by the American Institute of Architects as well as the Center for Transit-Oriented Development (CTOD), Transportation for America (T4America), the National Housing Conference (NHC), and LOCUS: Responsible Real Estate Developers and Investors.

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