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Notes from Novogradac

Novogradac’s Updated New Markets Tax Credit Mapping Tool Highlights Investments Found in all 50 States as of 2021

Published by Brad Elphick and Peter Lawrence on November 30, 2023

Novogradac’s New Market Tax Credit (NMTC) Mapping Tool has updated its database to show fiscal year (FY) 2021 data on qualified low-income community investments (QLICIs) by state and congressional district. The FY 2021 update gives important insight into the NMTC investments made over time since the creation of the tax credit.

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Final CRA Regulations Provide New Opportunities for Affordable Housing and Community Development

Published by Peter Lawrence on November 29, 2023

Recently released final Community Reinvestment Act (CRA) regulations could have a substantial impact on affordable housing, community development, historic preservation and renewable energy. For affordable housing, it will be influential beyond the low-income housing tax credit (LIHTC) world.

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Record Rental Income, Operating Expenses for Properties in Novogradac Survey; Inflation, HUD Caps Play Significant Roles

Published by Kelly Gorman on November 16, 2023

Rental income and operating expenses at low-income housing tax credit (LIHTC) properties tracked by Novogradac set records in 2022, each outpacing the rate of inflation during a year that saw the nation emerge from the worst of the COVID-19 pandemic while inflation was the highest in more than 40 years.

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Payroll for LIHTC Properties Sees Record Increase, But Maintains Long-Term Stability

Published by Kelly Gorman on November 16, 2023

After a unique one-year drop, payroll at low-income housing tax credit (LIHTC) properties tracked by Novogradac increased at a record pace in 2022. That increase came in a year when a dramatic surge in repairs and maintenance costs and an overall 10.4% increase in operating expenses overshadowed the 9.2% payroll jump.

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LIHTC Property Insurance Increased in 2022, but Jump Differed by Area

Published by Kelly Gorman on November 16, 2023

The familiar real estate maxim could just as easily apply to property insurance costs for properties financed by equity from low-income housing tax credits (LIHTCs): Location, location, location.

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Repairs, Maintenance Expenses See Big Jump in 2022: Start of a Trend or Catch-up Period?

Published by Kelly Gorman on November 16, 2023

Repairs and maintenance expenses for the 186,000 apartments in Novogradac’s proprietary data set of low-income housing tax credit (LIHTC)-financed properties saw a 21.7% increase in 2022, far outstripping the rate of inflation, the overall increase in expenses and any previous annual increase in the 13-year history of such data.

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Novogradac Renewable Energy Working Group Suggests Improvements to Domestic Content Bonus Credit Guidance that Would Support More Renewable Energy Development

Published by Rob Bryant on November 14, 2023

One key component of the Inflation Reduction Act’s (IRA’s) clean energy incentives is the domestic content bonus credit, but unfortunately, many solar and wind developers are unlikely to meet the current requirements for the domestic content bonus credit as currently drafted. If left unrevised by the U.S. Department of the Treasury, this will hinder the development of renewable energy in the United States. To address this possibility, the Renewable Energy Working Group (REWG) identified several concerns regarding the IRS Domestic Content Bonus Credit Guidance with regards to the IRA in a recent comment letter. 

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How to Qualify under Category 3 or 4 of the Low-Income Communities Bonus Credit Program

Published by Dirk Wallace on November 9, 2023

With the Low-Income Communities Bonus Credit program 2023 application now open, it’s important to understand the financial benefits and what the Internal Revenue Service (IRS) will require for eligibility.

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How do Income Limit Caps and ACS Data Affect DDAs and QCTs?

Published by Thomas Stagg on November 8, 2023

In the Sept. 21, 2023, Federal Register, the U.S. Department of Housing and Urban Development (HUD) designated difficult development areas (DDAs) and qualified census tracts (QCTs) for 2024. Low-income housing tax credit (LIHTC) properties located in these areas are allowed to increase their eligible basis by 30% for new construction and rehabilitation costs.

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Questionable Employee Retention Tax Credit Claims in the Spotlight

Published by Thomas Boman on November 2, 2023

The Internal Revenue Service (IRS) recently updated its frequently asked questions related to the employee retention tax credit (ERC) to outline procedures for employers to withdraw their ERC claims. This update was the latest in a series of communications warning taxpayers of the existence of aggressive ERC promoters and reminding taxpayers that they are responsible for returns filed in their name.

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