In 2007, the Community Redevelopment Agency of the City of Los Angeles (CRA/LA) applied to the U.S. Department of the Treasury for new market tax credits, which are credits against Federal income taxes for making qualified equity investments in low-income communities. With the tax credits, the CRA planned to provide debt financing and equity-like products for industrial, commercial, retail, and mixed-use real estate development projects that create jobs in low-income communities of the City of Los Angeles.
Principal Economist Alan Meister assisted CRA/LA with its application. Utilizing an economic impact analysis (i.e., an input/output model), Dr. Meister estimated the total number of jobs, both direct and secondary, that would be created by the construction and operation of real estate developments made possible with tax credits.
After a competitive application evaluation process, CRA/LA was ultimately allocated an award totaling $75 million in equity for which tax credits could be claimed.