Disaster Tax Relief Bill Could Spur 116,000 More Affordable Rental Housing Units

Published by Michael Novogradac on Tuesday, April 22, 2014 - 12:00am

Sens. Charles Schumer, D-N.Y., Robert Menendez, D-N.J., Michael Bennet, D-Colo., Mary Landrieu, D-La., Mark Udall, D-Colo., Kirsten Gillibrand, D-N.Y., Jay Rockefeller, D-W.Va., and Cory Booker, D-N.J., on April 9 introduced the National Disaster Tax Relief Act of 2014. The package of tax provisions aimed at providing relief to certain areas declared federal disaster areas in 2012 or 2013. These include areas affected by hurricanes Irene, Isaac and Sandy; tropical storms Debby and Lee; the Freedom and Noble wildfires; and various severe storms, straight-line winds, tornadoes, mudslides and/or flooding.

The legislation includes an annual increase of $500 million per year through 2016 in new markets tax credit allocations for community development entities serving in disaster areas declared in 2012 or 2013. The National Disaster Tax Relief Act also includes an increase in historic rehabilitation credits from 10 percent to 13 percent for buildings in affected disaster zones, and from 20 to 26 percent for historic buildings.

In addition, National Disaster Tax Relief Act of 2014 would increase affected states’ low-income housing tax credit (LIHTC) authority in 2014, 2015 and 2016 by the greater of $8 multiplied by the disaster-area population or 50 percent of the state housing credit ceiling for 2013.

Novogradac & Company’s preliminary estimates show that across 24 states and the District of Columbia, this would provide approximately $698 million a year of LIHTC, and over the three-year allocation period, provide just more than $2 billion in annual LIHTCs. Using historical data published by the National Council of State Housing Agencies regarding low-income housing units produced between 2009 and 2011, we project this increased LIHTC authority could finance more than 38,000 affordable apartments in the affected areas in 2014 and more than 116,000 units between 2014 and 2016.

Here is a breakdown of estimated LIHTC units by state:


Blog Chart Estimated LIHTC Units Produced by S. 2233
Click to Enlarge