CRA overhaul could put 85% of community development at risk, NCRC says

The potential overhaul of the Community Reinvestment Act (CRA) has significant implications for community development, with the National Community Reinvestment Coalition (NCRC) warning that 85% of current activity could be at risk. This is a critical concern for the real estate and property industry, as the CRA has long played a key role in promoting investment in low- and moderate-income communities. The estimated decline in yearly activity from $102 billion to $14.8 billion is a stark reminder of the potential consequences of changes to the CRA.

The NCRC's estimate is based on the assumption that banks will treat 0.625% of Tier 1 capital as a target, which could lead to a significant reduction in community development investments. This matters because community development projects often rely on CRA-motivated investments to get off the ground. Without these investments, many projects may struggle to secure funding, leading to a decline in affordable housing and community development initiatives. The real estate and property industry should be watching this development closely, as it has the potential to impact the availability of funding for community development projects.

As the CRA overhaul continues to take shape, it will be important to watch for further guidance from regulators and to see how banks respond to any changes. The industry should also be prepared for potential shifts in community development funding, and be looking for alternative sources of funding to support these critical projects. The ASID community should be paying close attention to this issue, as it has the potential to impact the availability of affordable housing and community development initiatives in their local areas.

Originally reported by housingwire.com. ASIDNews adds analysis for real estate & property readers.