Sandy Relief Bill Could Spur Creation of 50,000 Affordable Apartments

Published by Michael Novogradac on Wednesday, December 26, 2012 - 12:00am

Sens. Charles Schumer, D-N.Y., and Robert Menendez, D-N.J. announced that they will introduce The Hurricane Sandy and National Disaster Tax Relief Act of 2012. The tax package will include a $500 million emergency supplemental new markets tax credit (NMTC) allocation per year for three years for community development entities (CDEs) serving disaster areas. It would also increase the historic tax credit from 20 percent to 26 percent for the rehabilitation of buildings within the disaster zone.

In addition, The Hurricane Sandy and National Disaster Tax Relief Act of 2012 would increase affected states’ low-income housing tax credit (LIHTC) authority in 2013, 2014 and 2015 by $8 multiplied by the disaster-area population in the District of Columbia, New Hampshire, West Virginia, Virginia, Maryland, Delaware, Rhode Island, Connecticut, New York and New Jersey.

Novogradac & Company’s preliminary estimates show that across several states and the District of Columbia, this would provide approximately $255 million a year of LIHTC and over the three-year allocation period provide more than $750 million in annual LIHTCs. Using historical data published by the National Council of State Housing Agencies regarding low-income housing units produced between 2008 and 2010, we project this increased LIHTC authority could finance more than 50,000 affordable apartments in the affected areas.

Here is a breakdown of estimated units by state:

 Estimated Units
Produced 2013 - 2015
District of Columbia1,233
New Hampshire321
West Virginia1,323
Virginia7,458
Maryland4,512
Delaware3,135
Rhode Island306
Connecticut4,101
New York20,025
New Jersey8,838
Massachusetts1,449
Total52,701

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For more, join us in Miami at the Novogradac Tax Credit Developers Conference, Jan. 10-11 where we will discuss the status of the legislation.