As Congress prepares to reform our federal tax code, there is an opportunity to streamline the code to make higher education more affordable, while growing jobs and making students safer at colleges and universities across California.
That’s why I encourage Rep. Devin Nunes, R-Tulare, to include the Collegiate Housing and Infrastructure Act (CHIA) in any tax reform package he considers. With strong bipartisan support in Congress and the endorsement of dozens of leading universities, CHIA is a simple and cost effective way to move California forward.
By now, we all know about the crushing student debt resulting from the ever increasing cost of higher education. It’s a challenge in California and across the nation, but most people only think of these costs through the lens of tuition.
Some may be surprised to learn that room and board costs outweigh tuition at many public colleges and universities. Many public universities lack the funding to build new residence facilities, resulting in thousands of students being dependent on other non-profit housing options each year.
In fact, nonprofit housing is often much more affordable than any other option for students, but current tax law makes it more difficult for nonprofit housing to survive and thrive.
CHIA simplifies the tax code to treat all nonprofit student housing the same under the law. It allows more nonprofit entities – think co-ops, student religious groups, professional societies and fraternities and sororities – to leverage tax-deductible charitable contributions to support student housing. That means more facilities can be built, improved and maintained at no cost to taxpayers.
That’s good news for students and a boost for plumbers, roofers, carpenters, electricians, contractors and other construction workers in college towns nationwide. The national fraternity and sorority community alone have over $1 billion in capital improvement projects ready to commence after CHIA passes.
Those projects create jobs right here in Fresno and that’s only the tip of the iceberg when the broader reach of nonprofit student housing is considered.
Beyond the benefits of job creation and making college more affordable, passage of CHIA also holds the power to make student housing safer because the tax change will enable important safety improvements without requiring any state taxpayer support.
The combination of a lack of funds and an aging housing infrastructure creates serious fire safety challenges. For example, more than half of fraternity / sorority housing is at least 65 years older, and about half of those properties lack fire sprinklers.
With fire safety systems running upwards of $400,000 in many cases, there’s no way to raise the money to make fixes under current law. Passing CHIA provides a way for these nonprofit organizations and others to raise the funds needed to make student housing safer for generations to come.
When you consider critical safety issues in context with our collegiate housing crunch, a lack of state funding for new infrastructure and the fact that nonprofit groups like fraternities and sororities provide housing for thousands of students statewide, it’s clearly time to take action.
I encourage Nunes to push the House to include CHIA in its tax reform package. By streamlining the tax code to ensure that all contributions aimed at student housing are treated equally, this legislation will make college more affordable, create jobs and improve the safety of our student housing. That’s tax reform everyone can support.
Michael Der Manouel Jr. of Fresno is president of Der Manouel Insurance Group and has advised Greek organizations on insurance, housing and student safety issues since 1987. Connect with him at MDerMan@dmig.com.