The New Markets name
President Bill Clinton helped inspire the term “New Markets,” referring to disadvantaged areas where economic growth lagged behind the rest of the country.
CRF founder helps launch—and lead—New Markets Tax Credit program
An interview with Frank Altman
Even before President Bill Clinton signed the New Markets Tax Credit legislation into law in December 2000, CRF founder Frank Altman was a driving force in the program. Altman joined forces with a handful of other community development organizations in the mid-1990s to develop and promote the concept of a tax credit to foster job growth, community facilities, and neighborhood revitalization. The group’s work and advocacy led to the launch and successful implementation of the New Markets Tax Credit (NMTC) program.
In 2001, Altman served as the first president of the New Markets Tax Credit coalition, and has been a program advocate ever since. CRF is a leader in the NMTC field, receiving more than $749 million in allocations since 2001.
Where did the idea for the New Markets Tax Credit program begin?
Altman: “As a coalition, we saw the success of the Low Income Housing Tax Credit in spurring quality affordable housing, but it was limited to housing units. We wanted to create a similar public-private partnership to inspire investment, but using a more flexible vehicle aimed at rejuvenating entire communities.”
What was the coalition’s initial vision?
Altman: “The idea was that community development is broader than affordable housing. It’s about creating jobs, adding community facilities, and revitalizing neighborhoods comprehensively.”
What was the unmet need that prompted the program?
Altman: “In the late 1990s, even though the U.S. economy was booming, many areas of the country were still in trouble, not growing at a similar pace. These were areas where there was disinvestment: Real estate and buildings abandoned. Higher unemployment. Lack of services.”
How does the New Markets Tax Credit address these issues?
Altman: “We needed to overcome the perception that low-income areas are not the place to invest. The tax credit helps reduce the risk to an investor. We wanted to have a flexible tax credit that could be used in a variety of ways to maximize investment in low-income communities.”
What results has the program achieved?
Altman: “New Markets Tax Credits help change the lives of people. Many groups have used the program for human services, education, or healthcare facilities that create jobs and also help people get skills, improve their health, and get a quality education. The credit has definitely gained in popularity over the years and has injected tens of billions of dollars into disadvantaged communities and deserving businesses.”
What sets New Markets Tax Credits apart from other finance and community development tools?
Altman: “The key to success is that we’ve been able to get the program renewed every year, and it’s been supported on a bipartisan basis. As part of the recent economic stimulus, President Obama increased the allocation. It demonstrated the ability of New Market Tax Credit allocatees to get the money out into the communities where it’s needed.”
What has surprised you about the program?
Altman: “People were worried initially that there wouldn’t be enough applicants for the credit, but from the very beginning, we’ve seen demand run at least ten times greater than allocations. The credit has been extremely successful in attracting capital and making a positive difference in communities across the country.”
Looking back, what are you most proud of about the program?
Altman: “Of course, the passage of the legislation itself. And, I’m very proud of CRF’s leadership role in deploying the credit. We are one of the only groups that have been able to get New Markets Tax Credits flowing to small operating businesses, and we are among the top five total allocatees in the program’s history.”
Learn more about the New Markets Tax Credit loan from CRF.