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Texas Low Income Housing Information Service recently released a report titled “Fair Housing and Balanced Choices: Did Texas Reduce Government-Funded Segregation?” The report looked at the effect of a 2013 change in LIHTC award criteria on the location of LIHTC developments in the state’s five largest metro areas. These areas include Austin, Dallas, Fort Worth, Houston, and San Antonio. The new race-neutral criteria resulted in properties located in areas with lower concentrations of racial minorities and higher opportunity.
On Feb. 13, by a vote of 53 to 47, the United States Senate voted to confirm the nomination of Steve Mnuchin, a former investment banker and Hollywood film financier, to serve as Secretary of the Treasury. Mnuchin served as senior advisor and finance chair to the Trump campaign and recently served as chairman and corporate executive officer of OneWest Bank.
During Dr. Ben Carson’s confirmation hearing before the Senate Committee on Banking, Housing, & Urban Affairs, Carson spoke of harnessing the private sector to help those in poverty, and the Low Income Housing Tax Credit came up specifically during a conversation with Senator David Purdue (R-GA).
A study recently published online in Housing Policy Debate titled “How Location Efficient is LIHTC? Measuring and Explaining State-Level Achievement” finds that recently built rental housing funded by low-income housing tax credits is more likely to be in “location-efficient” neighborhoods than the overall housing stock. The study finds that state qualified allocation plans (QAPs), and an active nonprofit sector are key factors in the location efficiency of the LIHTC rental stock.
Representative Keith Ellison (D-MN) recently circulated a Dear Colleague letter urging the House Ways and Means Committee to use tax reform as an opportunity to end homelessness and housing poverty by keeping housing-related tax savings within housing. The letter asks representatives to join the letter to Ways and Means Chairman Kevin Brady and Ranking Member Richard Neal requesting that comprehensive tax reform provide additional resources for stable, decent, and affordable homes for low-income individuals and families.
The expectation that President Trump and Congress will cut corporate taxes is already affecting the pricing of LIHTCs for investors. The anticipation of comprehensive tax reform has made some LIHTC investors pause activity or make decisions based on the assumption of less equity per dollar of credit. Because the LIHTC is a dollar-for-dollar credit that allows corporations and banks to offset tax liability by investing directly in affordable housing projects, the value of these credits drop if tax rates go down.
The Federal Housing Finance Agency (FHFA) recently released a final rule titled, “Enterprise Duty to Serve Underserved Markets.” The rule came about because the Housing and Economic Recovery Act of 2008 (HERA) amended the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 to establish a duty for Fannie Mae and Freddie Mac (collectively, the Enterprises) to serve three specified underserved markets. These underserved markets are manufactured housing, affordable housing preservation, and rural markets.
A group of 2,000 organizations and businesses signed a letter urging Congress and the Trump administration to prioritize the LIHTC program during tax reform deliberations. The letter, submitted on behalf of the ACTION Campaign, highlights the accomplishments of the program and why it’s still needed.
A report recently published in the Journal of Housing Economics entitled “Poverty Concentration and the Low Income Housing Tax Credit: Effects of Siting and Tenant Composition” found that the LIHTC program could play a critical role in shaping the distribution of poverty in America. Using data from HUD, census data, and two newly constructed supplemental datasets containing information on tenants of LIHTC developments and LIHTC applications from developers, the authors examined two central questions.
Trulia, an online residential real estate site, recently released a study in a blog post entitled, “There Doesn’t Go the Neighborhood: Low-Income Housing Has No Impact on Nearby Home Values.” The study found that low-income housing funded with LIHTCs did not impact the value of nearby homes. The author’s analysis included 3,083 LIHTC sites in 20 of the least affordable housing markets. She examined changes in nearby home values before and after a LIHTC site was completed.
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