State of Our Tax Credit Union

Transcription

1 State of Our Tax Credit Union Federal Housing Update for HAND Peter Lawrence Novogradac & Company 1

2 What should we expect in 2016? 2

3 What should we expect in 2016? 3

4 novogradac.wordpress.com 4

5 Presidential Candidates and Affordable Housing DEMOCRATIC CANDIDATES REPUBLICAN CANDIDATES CLINTON SANDERS TRUMP 5

6 Presidential Candidates and Affordable Housing DEMOCRATIC CANDIDATES REPUBLICAN CANDIDATES CLINTON SANDERS TRUMP Includes housing as part of her policy platform Calls to increase supply of affordable rental homes by expanding annual LIHTC allocations for areas most in need Plans to create incentives at state and local level to enact effective land use rules and other regulations to promote development of new rental housing 6

7 Presidential Candidates and Affordable Housing DEMOCRATIC CANDIDATES REPUBLICAN CANDIDATES CLINTON SANDERS TRUMP Includes housing as part of policy platform Does not mention LIHTC in platform Has sponsored LIHTC legislation with Sen. Cantwell since 2011 Expand National Affordable Housing Trust Fund to at least $5 billion per year Goal of constructing, preserving and rehabilitating at least 3.5 million affordable housing units over next 10 years Expand Housing Choice Voucher program Wants developers to commit to longer than year low income use 7

8 Presidential Candidates and Affordable Housing DEMOCRATIC CANDIDATES REPUBLICAN CANDIDATES CLINTON SANDERS TRUMP Has not stated a position However, his father developed a substantial amount of unsubsidized affordable rental housing in NYC through FHA multifamily financing and the New York State Mitchell-Lama Housing Program 8

9 2017 Republican Republican Republican 9

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11 2017 Republican Democrat Democrat 11

12 2017 PROTECTING OURSELVES SEEKING RESOURCES 12 The Defensive Path The Offensive Path

13 New LIHTC Expansion Legislation S. 2962, Affordable Housing Tax Credit Improvement Act of 2016 Sen. Cantwell Sen. Hatch D-Washington R-Utah Sen. Wyden Sen. Schumer D-Ore. D-N.Y. 13

14 New LIHTC Expansion Legislation S. 2962, Affordable Housing Tax Credit Improvement Act of 2016 Includes: Phased-in 50% increase over 5 years Income averaging Minimum 4% rate for acquisition and bond-financed projects 14

15 Possible Upcoming Legislation Additional Resources Give states discretion to provide 30% basis boost for bond-financed projects State LIHTCs not s/t federal tax Repeal QCT population cap Indian areas generally treated as DDAs Discount rate modification 15 Sen. Maria Cantwell D-Washington

16 Possible Upcoming Legislation Sen. Maria Cantwell D-Washington Financial Feasibility 50% basis boost for ELI units Relocation costs included in eligible basis No basis reduction for certain energy tax credits Codify increased tenant income guidance 16

17 Possible Upcoming Legislation Financial Feasibility Modify student occupancy rules Modify 10-year rule Limits apply to acquisition basis Adopt uniform income eligibility for rural projects 17 Sen. Maria Cantwell D-Washington

18 Possible Upcoming Legislation Other Add Native American projects as QAP selection criterion Convert ROFR to purchase option Conform casualty loss rules 18 Sen. Maria Cantwell D-Washington

19 Proactive Proposals Private Activity Bond Conversion Proposal States could convert up to 18% of private activity bond volume cap into 9% LIHTCs 19 50% Max increase in 9% LIHTCs = about 50% Note: Joint Committee on Taxation estimates the cost of the bond conversion to be $9B over 10 yrs., compared to $4.1B over 10 yrs. for a phased-in 50% increase.

20 Proactive Proposals Private Activity Bond Conversion Proposal States could convert up to 18% of private activity bond volume cap into 9% LIHTCs 20 50% Max increase in 9% LIHTCs = about 50% Sen. Sherrod Brown (D-OH) Note: Joint Committee on Taxation estimates the cost of the bond conversion to be $9B over 10 yrs., compared to $4.1B over 10 yrs. for a phased-in 50% increase.

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25 Housing Trust Fund Mel Watt Federal Housing Finance Agency Director In calendar year 2015, contributions will be set aside by Fannie Mae & Freddie Mac Watt December 11, 2014 letters to Fannie Mae, Freddie Mac Grants to be for affordable rental housing that targets extremely low-income individuals and households HUD released interim rule on January 30, 2015 HUD announced HTF state allocations on May 5 Once state HTF allocation plans are approved by end of June, state can award HTF grants to developments

26 Housing Trust Fund How much should we expect for 2016? Housing Trust Fund Capital Magnet Fund $174M $93M HUD/Treasury Reported Amounts Top 10 State HTF Allocation Estimates California $10,128,143 New York $7,013,963 Texas $4,778,364 Florida $4,598,821 Illinois $4,302,012 Pennsylvania $3,862,285 Ohio $3,740,578 New Jersey $3,733,566 Michigan $3,522,622 Massachusetts $3,419,569 Virginia $3,139,830 Maryland $3,000,000 D.C. $3,000,

27 Housing Trust Fund Preliminary 2017 estimate using 1st quarter of Q filings from Fannie/Freddie Housing Trust Fund Capital Magnet Fund $229M $123M Preliminary Estimate Top 10 State HTF Allocation Estimates California $24,137,000 New York $15,784,000 Texas $8,860,000 Florida $8,333,000 Illinois $7,605,000 Pennsylvania $6,320,000 Ohio $6,012,000 New Jersey $5,763,000 Michigan $5,270,000 Massachusetts $5,042,000 Virginia $4,033,000 Maryland $3,287,000 D.C. $3,000,

28 State of Our Tax Credit Union Federal Housing Update for HAND Peter Lawrence Novogradac & Company 28