Do Housing Tax Credits Work as Well as They Could?
A recent study shows that California is actually providing more in subsidies to investors than we actually get back in project financing; adding as much as $26,000 to the cost of each LIHTC financed affordable unit. Further, real estate developers, contractors, bankers and investors capture 35% of every dollar in an LIHTC financed project, on average. By contrast, local government and permitting fees capture just 6% and construction labor just 14%.
Renovation Projects in Des Moines' Highland Park Neighborhood Could Receive $2.2M in Financial Aid
Proposed projects to redevelop two buildings in Des Moines' Highland Park neighborhood would receive more than $2.2M in financial aid from the city. City staff is recommending the project receive up to $1.67M in project-generated tax increment financing over 20 years as well as Federal Historic Tax Credits.
States Continue to use the LIHTC to Address the Needs of the Most Vulnerable Households
That the LIHTC has been used to address the needs of vulnerable populations – seniors, people with disabilities and extremely low-income (ELI) households (those with incomes at or below the federal poverty line, or 30% of the area median income, whichever is greater) – is not surprising. As more analysis becomes available, the extent to which the incentive is used and ways in which its use can be expanded is even more evident.
New "Transformational Mixed-Use Development" State Tax Credits in Ohio
Taxpayers can now access a new, nonrefundable insurance premium tax credit for capital contributions to certain "transformational mixed use developments". A piece of legislation finished during the recent lame duck session and signed into law allows property owners or insurance companies to apply to the Ohio Tax Credit Authority for certification and preliminary approval of tax credits against taxes imposed on insurance companies.
Michigan Governor Signs Legislation Reinstating State Historic Tax Credit
Michigan Gov. Gretchen Whitmer signed legislation that reinstates the state historic tax credit (HTC) through the end of 2030. S.B. 54 grants a state HTC for 25% of qualified rehabilitation expenses, with an annual statewide cap of $5 million and a per-taxpayer cap of $2 million.
New Tax Extender Legislation Passed for Renewable Energy, Carbon Capture Projects
Of importance in the stimulus is a one-year extension to the production tax credit (PTC) for wind projects under Section 45 of the tax code; a two-year extension to the investment tax credit (ITC) for solar projects under Section 48; a new five-year ITC for off-shore wind projects (without any phase-out) under Section 48; and a two-year extension of the PTC for carbon capture projects under Section 45Q.
NYCHA Bangs Out Another Affordable Housing Deal With Private Developer
The New York City Housing Authority (NYCHA), New York City Department of Housing Preservation and Development (HPD) and the New York City Housing Development Corporation (HDC) announced the closing of Twin Parks Terrace, a 182-units affordable housing development in the Bronx on NYCHA-owned land. Financing for this $81M Low Income Housing Tax Credit (LIHTC) project includes bond financing from HDC.
Can 2020 Bond-Financed Projects Access the Fixed 4% Rate in the COVID-19 Legislation?
The COVID-19 legislation provides a 4% fixed low-income housing tax credit (LIHTC) rate for bond-financed affordable housing projects that meet certain requirements. The fixed-rate should plainly apply to bond-financed projects that rely on 2021 bonds and are entirely placed in service after 2020. For non-bond financed projects, the fixed 4% rate applies to acquisitions of used buildings provided the credits were allocated after 2020.
District of Columbia Housing and Finance Agency Finances New Affordable Development in Takoma
On December 22 DCHFA issued $21.5M in tax-exempt bond financing and underwrote $9.8M in four percent low income housing tax credits (LIHTC) for a new development at 218 Vine Street in Ward 4's Takoma neighborhood. This project will also include nine percent LIHTC.