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On Nov. 15, HUD published the Difficult to Develop Areas (DDAs) for 2014 and indicated that the Qualified Census Tracts (QCTs) that were published April 20, 2012, will remain in effect. HUD also announced that in 2016 it will begin to use small-area fair market rents instead of metropolitan-area fair market rents to designate metropolitan DDAs.
The Housing and Insurance Subcommittee of the House Committee on Financial Services recently held a hearing on the implementation of the Biggert-Waters Flood Insurance Reform Act of 2012. The hearing’s purpose was to assess the ongoing implementation of the law.
Congress enacted the Biggert-Waters legislation to extend the National Flood Insurance Program (NFIP) for five years while enacting reforms to help address the program’s $24 billion debt load.
On Nov. 13, a settlement was reached in an important fair housing lawsuit. This case involved the southern New Jersey town of Mt. Holly. In 2003, Mount Holly declared a neighborhood called the “Gardens” blighted and sought to redevelop it, claiming that was the only way to end rising crime in the area and revive the township’s economy. But the redevelopment included new housing that would be too expensive for residents who wanted to stay.
The IRS recently released its latest LIHC Newsletter, which provides a forum for information about Section 42, the Low-Income Housing Tax Credit (LIHTC), and communicates technical knowledge and skills, guidance, and assistance for developing LIHTC properties.
On Oct. 17, the Mississippi Supreme Court upheld the income approach to valuation of affordable housing sites in Mississippi. Mississippi Code Section 27-35-50(4)(d) prohibits local governments from including the value of federal tax credits in their valuation of the properties for tax assessment purposes. The court confirmed the constitutionality of Mississippi Code Section 27-35-50(4)(d) and the Income Valuation Approach provided in the Mississippi Department of Revenue's Appraisal Manual.
On Oct. 21, the California Tax Credit Allocation Committee (TCAC) proposed extending the “Readiness-to-Proceed” deadline that applies to some 2013 low-income housing tax credit sites. The change would allow some in-state credit recipients with federal funding an additional 45 days to close their construction period financing as required under Readiness-to-Proceed point scoring. Under TCAC’s point system, 20 points is available to projects that are able to begin construction within 180 days of the credit reservation.
For tax credit sites that also receive less than $500,000 in combined federal financial assistance, HUD recently issued Notice 2013-23 that revised the financial reporting requirements for small multifamily housing developments. Specifically, the notice eliminates the audit requirements for small entities (defined as receiving less than $500,000 in combined federal awards) regardless of existing regulatory agreement requirements. Owners of these projects will be permitted to submit owner-certified financial statements.
Senator Maria Cantwell (D-WA) and a group of bipartisan senators together reintroduced S. 1442, which would amend the Internal Revenue Code of 1986 to make permanent the minimum low-income housing tax credit (LIHTC) rate for unsubsidized buildings and provide a minimum 4 percent credit rate for existing buildings. In other words, the bill would permanently extend the flat 9 percent credit rate and create a flat 4 percent credit rate for LIHTC allocations.
U.S. House Representative Jim McDermott (D-WA) recently introduced H.R. 3145 to amend Section 42 of the Internal Revenue Code of 1986 as it relates to homeless youth and veterans. The last modification to the student rule occurred in 2008 with the passage of the Housing and Economic Recovery Act, which created a new exemption to make full-time students who were in foster care tax credit eligible.
The Fair Housing Justice Center (FHJC) recently released a report entitled “Choice Constrained, Segregation Maintained: Using Federal Tax Credits to Provide Affordable Housing” that examines the location of affordable housing/Low-Income Housing Tax Credit (LIHTC) properties in the New York City region and how housing location can perpetuate segregation.
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