Notes from Novogradac
Housing stakeholders often have difficult choices to make due to various constituent needs, housing policy directives, and limited resources with which to work. As 2020 approaches, another issue is looming on the horizon: low-income housing tax credit (LIHTC) properties that will start to reach “year 30,” the year in which some LIHTC properties are no longer obligated to adhere to income and affordability requirements.
The Office of the Comptroller of the Currency (OCC) is currently soliciting comments in connection with an advance notice of proposed rulemaking (ANPR) aimed at updating the regulations that implement the Community Reinvestment Act (CRA) of 1977. The original intent of the CRA was to help meet the credit needs of the communities that banks serve.
Novogradac projects more than 65,000 additional rental homes could be financed from 2019 to 2028 if a provision is enacted to establish a minimum 4 percent floor for low-income housing tax credits (LIHTCs) generated by tax-exempt private activity bonds issued for multifamily housing. This would greatly enhance the LIHTC, an incentive that the National Council of State Housing Agencies’ 2016 Factbook reports is already responsible for the creation of more than 1 million affordable rental homes from 1987 through 2016.
While tax reform is projected to reduce the amount of affordable rental housing production financed by the low-income housing tax credit (LIHTC) by about 235,000 over 10 years, there existed prior to tax reform and still ex
On Nov. 6, Democrats took control of the House while Republicans retained control of the Senate. According to the Associated Press, Democrats have been declared the winner in 220 House seats, Republicans in 194 seats and 21 seats are still uncalled. Of those 22 races, Democrats are leading in nine, and Republicans are leading in 12. Assuming those races proceed as predicted, and the leading candidates in the 21 uncalled races are eventually confirmed, Democrats will have 229 seats in the House and Republicans will have 206.
In 2017, the 50 states and the District of Columbia reported issuing a record $15.3 billion in multifamily rental housing bonds, representing a 9.3 percent increase from the previous record $14 billion reported issued in 2016, according to the Council of Development Finance Agencies (CDFA). The $21 billion in reported combined multifamily and single family mortgage revenue bond issuance represents a 13.6 percent increase in the portion of the cap used for housing from 2016, when states reported a total of $18.5 billion for housing bond issuance.
Time and again, one of the criticisms of the low income housing tax credit (LIHTC) is that housing it finances is disproportionately located in high poverty and/or racially segregated communities. Moreover, many of these critics claim that the LIHTC stakeholders are actively exacerbating the problem by purposely siting LIHTC developments in high poverty and racially segregated communities.
Lame-duck sessions of Congress–the final weeks of a two-year term, those that follow an election–are a Rubik’s Cube of legislative periods. There are multiple moving pieces, each affecting others.
For affordable housing, community development and historic preservation advocates, the 2018 lame-duck session could be fertile ground for long-desired legislation. Or Congress could decide to work on the bare minimum before heading home for the holidays. It depends on moving pieces and how they each affect others.
(Updated Monday, Oct. 22, 2018, 8:25 a.m.)
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