On May 6, 2010, Sen. Maria Cantwell (D-Wash.) introduced the Job Creation and Housing Act of 2010 (S.3326), in an effort to jump start the struggling Low Income Housing Tax Credit (LIHTC) program. The bill would provide an exchange program for the 4% tax credit similar to that in the America Reinvestment and Recovery Act (ARRA).
The bill also includes a 5-year “carry-back” period that would require any tax rebates received as a result of the longer carry-back period to be reinvested in new LIHTC properties. The bill is co-sponsored by Sens. Barbara Boxer (D-Calif.), John Kerry (D-Mass.) and Chuck Schumer (D-N.Y.), and has been referred to the Senate Finance Committee.
Several other bills introduced in this Congress try to address the LIHTC program, a major source of funding for affordable housing development before the recession. The Low Income Housing Tax Credit Act of 2009 (H.R. 4109) is legislation to create a five-year carry back for LIHTC. It introduced in the U.S. House in November of 2009. This bill would enable investors to use the credits for their tax liability for the five preceding years.
The Low Income Housing Tax Credit Program (LIHTC) has struggled since the economic downturn. Several affordable housing projects came to a stop when the investor pool dried up and developers struggled to restructure deals. Congress tried to address some of the problems in the America Reinvestment and Recovery Act of 2009 (ARRA), with gap financing and tax credit exchange programs.
In December the House passed H.R. 4213, a bill to extend the ARRA exchange provisions to allow states to turn in some of their 9% tax credits for cash, which states could then award to LIHTC projects. It is not clear when the Senate will take up the bill.
AAHSA continues to advocate for solutions to the tax credit market and for projects stalled by the recession.
For more information contact Alayna Waldrum.