An NPR investigation has discovered that the tax credit is costing more even though fewer units are getting built. Finders fees, and middle men eat up a large chunk of the tax credit. Inflated construction costs and fraud take the rest. There's no oversight so billions are made off the backs of tax payers and the poor.
We've got to be realistic about the fact that investors need some return."
That return comes partly in the form of the fee that developers and syndicators earn for their work. The association of state agencies recommends developers receive no more than a 15 percent fee from the total development cost, but the actual percentage varies by state. So if a building costs $20 million, a developer would receive $3 million.
Cox discovered his partners Lloyd Boggio and Matt Greer were stealing money from their developments, and he eventually joined them. Together, according to court records, $34 million was stolen from 14 tax credit projects, including almost $2 million from Labre Place.