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Legislation in Florida that would increase spending on affordable housing, reduce the ability of local governments to impose certain restrictions on affordable housing development and allow property tax exemption for certain affordable housing has been approved by both chambers in the Legislature and is now on the desk of Gov. Ron DeSantis. S.B. 102 would provide up to $150 million to the Florida Housing Finance Corporation for specified uses such as infill and projects near military installations; allow corporate taxpayers to direct certain tax payments to the State Apartment Incentive Loan (SAIL) program; increase the amount of tax credits available through the state’s Community Contribution Tax Credit Program for affordable housing from $14.5 million to $25 million; preempt requirements by local governments concerning zoning, density and height to allow streamlined development of affordable housing on commercial and mixed-use zoned areas under certain circumstances; allow local governments to bypass state and local laws to approve affordable housing in commercial and industrial parcels, but not residential parcels; remove the ability to install local rent control; allow property tax exemptions for land owned by a nonprofit and leased for at least 99 years for the purpose of affordable housing, affordable housing properties with at least 70 units and for extremely low-income or very-low-income properties if authorized by a local county or municipality; and more.
Legislation introduced in the Texas Senate would double the applicant cap for allocation of low-income housing tax credits (LIHTCs) and forbid the state qualified allocation plan from including a land use restriction agreement or affordability beyond the federally required minimum period. S.B. 1925 would increase the maximum allocation amount to a single applicant from $30 million to $60 million for a single round. The individual development amount would remain $20 million.
The Financial Accounting Standards Board (FASB) today published Accounting Standards Update (ASU) 2023-02, which expands the proportional amortization method to account for investments in all tax credit structures. That accounting method was previously allowed only for low-income housing tax credit (LIHTC) investments, but now is available, by election, to all community development tax credit investment reporting that meets five conditions. Under the new guidance, reporting entities can make accounting policy elections on a tax-credit-program-by-tax-credit-program basis, rather than for individual investments or at the reporting entity level. For public business entities, the new amendments are effective for fiscal years beginning after Dec. 15, 2023. For all other entities, the amendments are effective for fiscal years beginning after Dec. 15, 2024. Early adoption is permitted for all entities in any interim period. For calendar-year-end entities, this would include the first quarter ending March 31, 2023.
A bill introduced in the New York Senate would add a commitment to provide end-to-end fiberoptic architecture for delivering broadband to properties to the state’s low-income housing tax credit (LIHTC) scoring and ranking criteria. S.B. 5911 would take effect immediately upon being signed into law.
The U.S. Department of Housing and Urban Development (HUD) will publish a notice in Tuesday’s Federal Register requesting public review and comment on a proposed scoring and ranking methodology for the National Standards for the Physical Inspection of Real Estate (NSPIRE) proposed rule published in 2021. The methodology will be implemented when the final NSPIRE rule is published and converts reviews into a numerical score while setting a thresholds for a failure of an inspection and when an enforcement referral is automatic or required. Comments are due April 27 and can be submitted at [email protected]
The U.S. Department of Housing and Urban Development released a draft of a notice to provide clarification for Section 8 Project-Based Rental Assistance (PBRA) Housing Assistance Payment (HAP) contract bifurcations. The notice addresses issues that arise when a single HAP contract is divided into two or more contracts following HUD approval. The notice proposes to establish clear standards for HUD approval of such requests and steps for approval.
A bill introduced in the Texas Legislature would forbid an increase in rent during a lease agreement for properties financed with low-income housing tax credits (LIHTC) unless as provided under rental subsidy programs. H.B. 1344 would add the provision to existing regulations forbidding locking out or seizing property of tenants without judicial support.
Eight states, the District of Columbia and the U.S. territories except Puerto Rico will receive the small-state minimum allocation for 9% low-income housing tax credits (LIHTCs) in 2023, based on resident population figures published by the Internal Revenue Service in Notice 2023-22. The resident population figures are also used to calculate private activity bond (PAB) cap. Alaska, Delaware, Montana, North Dakota, Rhode Island, South Dakota, Vermont, Wyoming, the District of Columbia and the territories will all receive $3,185,000 in 9% LIHTC allocation, while other states will receive $2.75 multiplied by their population. Those states plus Hawaii, Idaho, Kansas, Maine, Mississippi, Nebraska, New Hampshire, New Mexico and West Virginia will receive the small-state minimum PAB cap of $2,990,375, while the other states will receive $120 multiplied by their population figure.
A bill introduced in the Hawaii Legislature would require the Hawaii Housing Finance and Development Corporation to hold a minimum of two application periods per year for affordable housing financing, including the state low-income housing tax credit (LIHTC). H.B. 675 also would allow the application period for four state programs to be combined for administrative efficiency. There currently is one LIHTC application round per year in Hawaii.
Legislation introduced in the Montana House of Representatives would create a state low-income housing tax credit (LIHTC). H.B. 829 would create a workforce housing tax credit with an annual statewide cap of $1.5 million. The credit could be claimed over six years and would be effective for tax years beginning on or after Jan. 1, 2024, with a sunset date of Dec. 31, 2029. Similar legislation was passed by the Legislature in 2021 and vetoed by the governor.
Taxpayers earning less than $60,000 in a taxable year and who also receive New York’s historic barn rehabilitation tax credit (HTC) would be eligible for refundable credits under legislation introduced in the state Senate. S.B. 3582 would allow taxpayers earning $60,000 or less to receive a credit or refund for the amount of the barn HTC and those earning more than $60,000 would be allowed to carry the credit forward if desired.
A bill introduced in the Hawaiian Legislature would allow developers to offer vacant units in low-income housing tax credit (LIHTC) properties set aside for supportive housing to other income-eligible tenants after reasonable attempts to rent the unit to a special-needs tenant. S.R. 49 emphasizes the need for supportive housing under the LIHTC, but cites the need for affordable housing of all types.
Legislation introduced in the Texas Senate would allow an occupancy preference for employees of school districts in which low-income housing tax credit (LIHTC) properties are built. S.B. 2328 would allow teachers and other employees of such school districts to receive preference if all other occupancy requirements are met under state and federal law. It would take effect Sept. 1.
President Joe Biden unveiled a $6.9 trillion fiscal year (FY) 2024 budget blueprint Thursday that includes a $28.3 billion expansion of the low-income housing tax credit (LIHTC), the $15.6 billion creation of a neighborhood homes tax credit (NHTC), permanency for the new markets tax credit (NMTC), $73.3 billion (a $1.1 billion increase) in proposed spending for the U.S. Department of Housing and Urban Development (HUD) and $341 million for U.S. Treasury’s Community Development Financial Institutions (CDFI) Fund, an increase of $17 million or 5% from 2023.
Sweeping legislation that would expand the 9% low-income housing tax credit (LIHTC), lower the financing threshold for private activity bond financing from 50% to 25%, create a Neighborhood Homes Tax Credit (NHTC), create a middle-income housing tax credit (MIHTC) and provide basis boosts for extremely low-income households, rural and Native American communities was introduced today in the Senate by Sen. Ron Wyden, D-Oregon. The Decent, Affordable, Safe Housing for All (DASH) Act would also provide a renter’s tax credit for affordable housing operators who provide homes to low-income tenants and a refundable first-time homebuyer tax credit. A Novogradac analysis of the 2021 version of the legislation concluded that it could finance the creation and rehabilitation of nearly 2 million affordable homes. Wyden’s office released a summary of the bill and a section-by-section summary. Earlier in the day, legislation to create the NHTC was introduced.
Legislation to create a tax credit for the rehabilitation of deteriorated single-family homes in distressed neighborhoods was introduced today in the U.S. Senate. The Neighborhood Homes Investment Act would create a credit for the lesser of the excess of development costs over the sales price, 35% of development costs or 28% of the national median price for new homes. It would be available for qualifying homes sold at prices generally no more than four times the applicable area median income (AMI) to buyers whose income is no more than 140% of the AMI.
A report from the University of Montana Bureau of Business and Economic Research shows that the addition of a state low-income housing tax credit (LIHTC) would significantly increase use of federal 4% LIHTCs and would increase the number of LIHTC-financed homes across the state by 40.8% annually. An Assessment of the Potential Impacts of a Montana Low-Income Housing Tax Credit evaluated the effect of a state credit similar to one passed by the state Legislature but vetoed in 2021. The report finds “expected net positive impacts from the additional economic activity stimulated by expanding affordable housing development in the state.” No legislation has been introduced in the current session of the Montana Legislature to enact a state LIHTC.
Legislation in the North Carolina House of Representatives would reinstate the state low-income housing tax credit (LIHTC) that expired in 2015. H.B. 208 would bring back a state credit for taxpayers that receive a federal LIHTC allocation. The state LIHTC would have a sliding scale for a percentage of basis for which the state credit is allowed, based on the type of set-aside elected by the development. The state LIHTC would not be available to bond-financed properties. The North Carolina LIHTC would be effective for taxable years beginning on or after Jan. 1, 2023, and would sunset Jan. 1, 2027.
Mississippi legislation that would have created a state low-income housing tax credit (LIHTC) died in committee. S.B. 3057 would have created a state credit for properties for up to the amount of federal LIHTC allocation with a $4 million annual statewide cap. The bill failed to advance from the Senate Finance Committee.
The Federal Housing Finance Agency (FHFA) today announced that the Housing Trust Fund (HTF) and Capital Magnet Fund (CMF) will receive a combined $545 million for affordable housing initiatives this year.
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