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On Feb. 12, Democratic presidential candidate and former Secretary of State Hillary Clinton released her “Breaking Every Barrier Agenda,” an economic plan that includes several proposals to address the affordable rental housing crisis.
HUD recently issued notice 2016-01 announcing the passbook savings rate used to determine annual income from net family assets. It will become effective Feb. 1, 2016. In addition to HUD programs, the imputed interest rate is also used to calculate annual income at LIHTC sites when a family has net assets in excess of $5,000.
In anticipation of funding from the National Housing Trust Fund (HTF) this year, housing agencies have been developing allocation plans and seeking input from constituents. The HTF is the newest source of affordable housing funding. It is a new rental housing program for extremely low- and very low-income households that was created by the Housing and Economic Recovery Act (HERA) of 2008.
According to a report entitled “Budget and Economic Outlook: 2016 to 2026” by the Congressional Budget Office (CBO), in 2016, the federal budget deficit will increase, in relation to the size of the economy, for the first time since 2009.
The Federal Housing Finance Agency (FHFA) recently released its proposed “Duty to Serve” rule, which would require the Government-Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac to support housing for lower income families in three underserved segments of the housing finance market.
Congress has passed and the president, on Dec. 18, signed the Protecting Americans from Tax Hikes (PATH) Act of 2016. The legislation makes permanent the minimum 9 percent low-income housing tax credit (LIHTC) applicable percentage or rate for federally unsubsidized developments. This doesn’t apply to the acquisition cost of existing projects or projects that use tax-exempt bond financing. These projects must still use the floating 4 percent tax credit percentage. This amendment is retroactively effective as of Jan. 1, 2015.
HUD recently published a notice designating difficult development areas (DDAs) and qualified census tracts (QCTs) for 2016. A DDA for the LIHTC program is an area designated by HUD with high construction, land, and utility costs relative to its area median gross income (AMGI). DDAs are eligible for tax credits at 130 percent of qualified basis, meaning that a greater percentage of the development costs are funded by the tax credit than in areas not designated a DDA.
The National Association of Home Builders (NAHB) recently released an analysis of how many people have benefitted from the LIHTC program since it was created in 1986. According to the NAHB, approximately 6.5 million low-income households, or roughly 13.3 million people, have lived in affordable apartments financed by the Housing Credit as of 2013. This estimate is the first to reflect the impacts for the primary beneficiaries of the program, the low-income households who live in the Housing Credit apartments.
A 2015 study published in Urban Studies by researchers at Texas A&M University, titled “Unpacking the impacts of the Low-Income Housing Tax Credit program on nearby property values,” questions the perception of affordable, subsidized housing driving down housing prices in surrounding buildings. It looks at changes in housing prices before and after the introduction of LIHTC-subsidized housing. Researchers examined data from Cleveland, Ohio, and Charlotte, N.C., from 1996 to 2007, classifying properties based on the proximity to LIHTC developments.
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