New Markets Tax Credit (NMTC) Program Evaluation

Research Report

New Markets Tax Credit (NMTC) Program Evaluation

Final Report

Abstract

The New Markets Tax Credit (NMTC) program encourages investment in low-income areas by providing tax credits to private investors through certified Community Development Entities (CDEs) that invest in businesses and real estate projects for economic and community development purposes.

This first formal evaluation of the NMTC program is national and program-wide in scope. Information collection was limited to projects initiated as of December 2007. In its early years, the NMTC program operated as intended-encouraging investments in low-income areas for a diverse range of projects. The most prevalent results were provision of advantageous financing, real estate development, additions to local tax bases, and job creation or retention. NMTC projects also added to or expanded community amenities, services, and facilities and supported small businesses and organizations. Outputs and outcomes varied by project, as did the need for a public subsidy and project viability.

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