Notes from Novogradac
On Sept. 13, the U.S. Census Bureau the released the 2017 American Community Survey (ACS) data. With the release of the 2017 ACS data, Novogradac & Company is able to estimate the national median income, state median incomes as well as low-income housing tax credit (LIHTC) income limits for many areas through 2020.
About the Calculations
The (ACS) is an integral part of HUD’s calculation of area median income. The 2018 ACS data will be used by HUD to calculate the 2020 income limits for LIHTC and Section 8 properties.
On Aug. 31, the U.S. Department of Housing and Urban Development (HUD) released the fair market rents (FMR) for fiscal year (FY) 2019.
Under H.R. 6627, legislation introduced by two members of the House Ways and Means Committee, Reps. Jason Smith, R-Miss., and Terri Sewell, D-Ala., an additional $1 billion in new markets tax credit (NMTC) allocation authority would become available to community development entities (CDEs) that commit to investing in rural jobs zones. The legislation defines a rural jobs zone as any area outside a city or town with a population of 50,000 or more and its immediate adjacent urbanized area, using the definition of areas eligible for assistance under the U.S.
Each year the U.S. Department of Housing and Urban Development (HUD) publishes a list of difficult to develop areas (DDAs). Low-income housing tax credit properties located in areas that are designated as DDAs are eligible for a 130 percent boost in eligible basis for determining the amount of LIHTCs a building can generate.
The 2018 income data released by the U.S. Department of Housing and Urban Development (HUD) provide an opportunity to examine trends nationally as well as at the local market level.
Nationally, the income data illustrates a stark contrast in the nation’s economy today as compared to four years ago. Below is the area median income (AMI) map Novogradac published showing the change from 2013 to 2014 (red represents negative income growth while green is positive growth).
In the seven years Novogradac has analyzed operating and expense data for low-income housing tax credit (LIHTC) properties, operating expenses for buildings geared toward senior tenancy have been consistently lower than for family properties.
The gap between operating expenses for low-income housing tax credit (LIHTC) properties that are acquired and rehabilitated and those that are newly constructed is the largest it’s ever been, according to the 2018 Novogradac Multifamily Rental Housing Operating Expense Report-Survey and Analysis of LIHTC Properties.
Late last month the Joint Committee on Taxation (JCT) released its Estimates of Federal Tax Expenditures for Fiscal Years 2017-2021. As in years past, the report highlights the comparatively low cost of the low-income housing tax credit (LIHTC), historic tax credit (HTC), renewable energy production tax credit (PTC), renewable energy investment tax credit (ITC), and new markets tax credit (NMTC) compared to other tax expenditures.
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