Notes from Novogradac

Published by Mark Shelburne on October 15, 2019

On Feb. 26, 2019 the Internal Revenue Service (IRS) published final regulations regarding low-income housing tax credit (LIHTC) allocating agencies’ responsibilities for monitoring properties’ compliance. The provisions replaced temporary requirements contained in Rev. Proc. 2016-15 and represent a significant departure from current practices.

Published by John Sciarretti, Michael Novogradac on October 14, 2019

The Treasury Department is widely expected to release updated opportunity zones (OZ) regulations in the near future–with the regulations first going to the Office of Information and Regulatory Affairs, perhaps this month, for clearance before being released to the public 30-plus days later.

Published by John Sciarretti, Michael Novogradac on October 7, 2019

Treasury is expected to release updated opportunity zones (OZ) regulations in the coming weeks, and we expect that the updated regulations will merge the first two tranches of regulations into one and provide more clarity on many remaining issues, as well as some outright changes. Before their release, however, Treasury must first send the updated regulations to the Office of Information and Regulatory Affairs (OIRA) for their review and comment, after which, the regulations can be released.

Published by Peter Lawrence on October 7, 2019

It is systematic barriers, not pure preference, that prevent lower-income families from moving to areas of high opportunity, according to research released by Brookings at a Sept. 19 event. This new research from Harvard University’s Opportunity Insights serves as a reminder of the importance of affordable housing in areas of high opportunity.

Published by Peter Lawrence on October 2, 2019

Harvard’s Joint Center for Housing Studies recently released a working paper that argues that a national response to exclusionary land zoning practices is needed to effectively resolve not only the affordable housing crisis, but to improve the declining rates of economic mobility and productivity as well.

Published by Dirk Wallace, Michael Novogradac on September 30, 2019

Since the enactment of the opportunity zones (OZ) tax incentive, which was designed to increase private capital investment in low-income communities and low-income community businesses, there has been great interest in using the new incentive to create more affordable rental housing. Participants in the OZ incentive are not limited to investing in affordable rental housing, but the incentive has aspects that are attractive to affordable housing developers and investors. For example, OZs aren’t subject to an allocation limit such as the low-income housing tax credit (LIHTC).

Published by James R. Kroger, Thomas Stagg on September 24, 2019

California lawmakers passed A.B. 1482 this month that would impose a statewide limit on rent increases and require just cause for eviction or termination of tenancy on many rental properties. While this new law will likely have little to no impact on low-income housing tax credit (LIHTC) and tax-exempt bond (TEB) properties, it is still important to understand the mechanics and potential issues on market rate units.  The legislation will take effect in January 2020 and sunset in 2030, however, rent restrictions under the new law are retroactive to March 15, 2019.

Published by Michael Novogradac on September 20, 2019

As the opportunity zone (OZ) incentive continues to gather momentum and interest, Novogradac has been tracking and compiling data on opportunity funds and their plans. In June, a post in this space provided the results of an initial survey of funds raised and related information. Since that writing, activity in the OZ community has continued and based on Novogradac research the amount of capital raised by qualified opportunity funds (QOFs) is nearly $2.5 billion.

Published by Thomas Stagg on September 11, 2019

On Aug. 30 the U.S. Department of Housing and Urban Development (HUD) published fair market rents (FMRs) for fiscal year (FY) 2020 in Federal Register Vol 84 No. 169. While HUD continuously strives to provide the most accurate FMRs, it is constrained by the data that is available. Occasionally, a user will believe that the FMRs calculated by HUD do not accurately reflect the rents for the area.

Published by Thomas Stagg on September 9, 2019

As more and more developers are exploring the average income minimum set-aside, one of the looming questions is how income limits should be calculated for units that are not using the 50 percent and 60 percent limit that are published by HUD for low-income housing tax credit (LIHTC) and tax-exempt bond developments.