In the News

RSS

The Joint Committee on Taxation (JCT) recently released its annual report on federal tax expenditures, listing over 150 tax provisions that are expected to reduce federal revenue over the coming years. As in years past, the report shows the comparatively low cost of the low-income housing tax credit compared to other tax expenditures. New this year is the Opportunity Zones (OZ) incentive, created as a result of tax reform in late 2017.

Harvard’s Joint Center for Housing Studies recently released its State of the Nation’s Housing Report. The report paints a grim picture centered around high rents, low wages, and booming wealth inequality. While the U.S. housing market has shown some improvements, such as the national homeownership rate increasing for the first time in 13 years, the report shows that many challenges still persist, especially for lower-income Americans.

The Massachusetts Supreme Judicial Court recently upheld a lower court’s ruling supporting a nonprofit developer’s right of first refusal to purchase an LIHTC site once a third party makes an enforceable offer to purchase the site. In Homeowner’s Rehab Inc. v. Related Corporate V SLP LP the court ruled that the right of first refusal doesn’t require a bona fide offer to be made and accepted with the consent of the special limited partner.

LIHTC sites are operating better than in any other period during the program’s history, according to a recent study issued by CohnReznick, an accounting and advisory service firm. Entitled “Housing Tax Credit Investments: Investment and Operational Performance,” the study incorporated data from more than 22,000 Housing Credit properties, 33 Housing Credit syndicators, and two of the nation’s largest institutional investors.

A recent report from the Terner Center for Housing Innovation at UC Berkeley, “The Links Between Affordable Housing and Economic Mobility: The Experiences of Residents Living in Low-Income Housing Tax Credit Properties,” examined the experiences of tenants living in LIHTC housing. The report finds that tenants are generally satisfied with the housing stability, economic mobility, and access to education provided by LIHTC housing.

The National Fair Housing Alliance, a national organization dedicated to ending discrimination in housing, recently released its 2018 fair housing trends report, Making Every Neighborhood a Place of Opportunity, which outlines key obstacles to achieving the goals of the Fair Housing Act. The 2018 report assesses some of the progress that has been made, lays out the ways in which the Fair Housing Act has been undermined in recent years, and outlines some of the newer and emerging issues to be addressed. Here are some report highlights:

The congressional Joint Economic Committee (JEC) recently held a hearing to consider the potential positive impacts that Opportunity Zones tax incentives, enacted in the Tax Cuts and Jobs Act of 2017, could have for low-income communities. The Opportunity Zone program is intended to spur investment in distressed communities by allowing taxpayers specialized tax treatment, including deferred capital gains, for investments in Opportunity Funds, which must in turn invest at least 90 percent of their assets in businesses located in qualified Opportunity Zones.

Revenue Procedure 2017-58, released in October 2017, provided the annual inflation adjustments for more than 50 tax provisions, including the tax rate schedules and other tax amounts for 2018, as adjusted for inflation for 2018. But a few months later, Congress passed the new tax law with the Tax Cuts and Jobs Act. The new tax law not only amends the income tax rates for individual taxpayers, but it also includes many other changes that affect individual taxpayers and business taxpayers.

HUD recently announced the 2018 income limits for the MTSP housing programs effective April 1, 2018. This includes low-income housing tax credits and tax-exempt bond financing. HUD advises that the income limits are effective immediately for all HUD programs, whereas the IRS allows a transition period from the date of publication to implement the new limits. According to IRS Revenue Ruling 94-57, income limits must be implemented on the effective date or no more than 45 days from the published date.

A recent study published by the National Renewable Energy Laboratory found that nearly half of all the residential rooftop solar potential in the United States is available atop low- to moderate-income households, representing a 320 gigawatt opportunity.