Solar Installation Provides Free Power to Tenants

By Jennifer Dockery, Staff Writer, Novogradac & Company LLP

In January, residents of three affordable housing complexes in San Francisco began benefiting from a solar power system installed through California Solar Initiative’s Multi-family Affordable Solar Housing (MASH) program. Plaza East Apartments and Hayes Valley North and South are part of an 11-site renewable energy project being developed by Sunwheel Energy Partners (Sunwheel), an affiliate of McCormack Baron Salazar (MBS). Residents at each property will receive 50 percent of the energy produced by the solar system free of charge. As an added benefit, Sunwheel’s partner in the project, Real Goods Solar (Real Goods) hired residents to install the solar panels. To celebrate a project that reduced energy costs and provided jobs, Sunwheel, Real Goods, the city of San Francisco, funding partners and residents held a ceremonial ribbon cutting at the Plaza East Apartments on January 25.

 

 

 

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Annual Federal Budget Process Starts Anew

By Michael J. Novogradac, CPA

The annual federal budget process starts anew with the release of President Barack Obama’s proposed $3.8 trillion budget for 2011. The federal government’s fiscal year ends September 30, and every year, in early February, the President submits his proposed budget to Congress. From there, the battles begin as House and Senate committees hold hearings and vote to authorize legislation and appropriate money to operate the federal budget for another year.

 

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Exit Strategies for Low-Income Housing Tax Credit Projects

By Jing Chen, CPA, Novogradac & Company LLP

As low-income housing tax credit (LIHTC) projects reach the last year of the mandatory 15-year compliance period, owners and investors face the challenge of defining exit strategies for their investments. In addition, many other LIHTC properties are having difficulties generating positive cash flow or significant tax benefits for their investors — either because of complications in the property’s operations or because of the global economic downturn. Owners and investors in these properties may seek a change via some form of refinancing or restructuring, including getting a fresh allocation of tax credits, and there are several important steps that should be considered.

 

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Grantees Plan Rental Housing Strategies to Restore Neighborhoods

By Jennifer Hill, Staff Writer, Novogradac & Company LLP

The U.S. Department of Housing and Urban Development (HUD) announced in January the awarding of $1.93 billion to nearly 60 entities — states, local governments and not-for-profit housing developers — in the second round of the Neighborhood Stabilization Program (NSP). NSP provides competitive grants to revitalize neighborhoods devastated by foreclosed and abandoned properties.

 

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Q&A	Single Tier vs. Master Lease Structure

By Tom Boccia, CPA, Novogradac & Company LLP

Question: What are some common differences for a historic tax credit (HTC) project using the single tier structure vs. the master lease structure?

Answer: First, we must have an understanding of the two types of structures before we can discuss the relative advantages and disadvantages of each.

The traditional structure, which is often referred to as the single tier structure, or direct investment structure, is similar to that which is used in the low-income housing tax credit world. A single entity owns the historic property and incurs all of the qualified rehabilitation expenditures (QRE). Prior to the property being placed in service, a historic tax credit investor is admitted into the partnership for the majority ownership, usually 99.99 percent, and the general partner retains a .01 percent interest. Generally, allocations of income, loss, tax credits and cash flow are made to the partners in proportion to the partnership interests, subject to certain limitations.

 

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The National Housing Conference (NHC) will honor the Federal Home Loan Banks’ Affordable Housing Program (AHP) with the 2010 “Housing Program of the Year” Award at its 38th annual gala in Washington, D.C. on June 9.

 

On January 12, the National Multi Housing Council (NMHC) issued guidance to help apartment managers understand their responsibilities relating to the 2010 Census.

 

The January 21 Federal Register reported that HUD was issuing for public comment a comprehensive set of revised closing documents for use in Federal Housing Administration (FHA) multifamily rental projects.

 

In January, Maryland Gov. Martin O’Malley announced the release of the state’s energy agenda for 2010, emphasizing renewable energy production and tax credits. Proposed legislation calls for extending renewable energy credits for businesses interested in going green.

 

Enterprise Community Investment Inc. and National Community Fund I LLC, closed in January on a $22.3 million new market tax credit (NMTC) transaction to finance the construction of the Harrison Circle Building at the Morris Heights Health Center (MHHC) in Bronx, N.Y.

 

The Community Affordable Housing Equity Corporation (CAHEC) used state and federal historic tax credits to provide nearly $7 million to complete the renovation of the F.W. Woolworth building in Greensboro, N.C.

 

The U.S. wind energy industry broke all previous records by installing nearly 10,000 megawatts (MW) of new generating capacity last year — but lags in manufacturing — according to a report released in January by the American Wind Energy Association (AWEA).