IRS To Consider Changing Regulations for Rental Adjustments at LIHTC Properties Where Residents Pay Utilities
The Internal Revenue Service (IRS) has agreed to consider changing its regulations governing rent adjustments at low-income housing tax credit (LIHTC) properties where residents pay all or a portion of their utilities, according to the National Multi Housing Council (NMHC). NMHC joined with affordable housing professional associations including the Council for Affordable and Rural Housing (CARH), the National Apartment Association (NAA), the National Affordable Housing Management Association (NAHMA), the National Association of Home Builders (NAHB) and the National Leased Housing Association (NLHA) to urge the IRS to consider the issue. NMHC says current regulations overestimate utility costs, and thus reduce rental income, because they use data from mostly older properties to establish the rates even though most LIHTC properties are newer and much more energy efficient. The groups are also encouraging the IRS to amend their rules and allow properties to become stabilized before having to potentially reduce rental income due to utility adjustments. NMHC reports that the IRS has indicated it will take action on the matter in 2004. Click here for a joint letter from the groups outlining their concerns.