| The Community Renewal Tax Relief Act of 2000 was enacted to spur development in economically distressed communities within the United States. One of provisions of this bill was to create tax incentives for investment in small businesses within these distressed areas. This provision led to the creation of the federal economic development program, New Market Tax Credit Program, which draws private investors to low income neighborhoods through the provision of federal tax credits. Originally, the Program was approved for 7 years and has been extended in subsequent years. In 2013, this program came into question of whether or not it should be extended once again and whether it was working. However, supporting documentation of the impact of the program is sparse. Since the implementation of this program in 2003, there have been gaps in its program assessment, which this paper attempts to fill. This paper adopts both case study and quantitative methods to analyze the impact of the New Market Tax Credit Program on census tracts within New York. A difference in difference regression model was used to compare changes in poverty rates between low income census tracts that have received investment due to the Program and those have not and estimate the effect of the Program. Using the case study method, projects funded using New Market Tax Credits showed small employment growth and greater access to health and human services in high need neighborhoods. The results of the econometric analysis show that there is a statistically significant negative correlation between receiving investment due to the Program and the change in poverty rate. |
