Two serious 'Alerts' from Nixon Peabody
The firm of Nixon Peabody has posted two important "Alerts" in affordable housing law.
The first item notes an important change that it says appeared quietly -- perhaps too quietly -- in last month's final rule on the use of project-based Section 8 vouchers. Updating its own previous posting on the subject, it says the rule has special importance for projects subsidized by project-based vouchers that also receive extra low-income housing tax credits (LIHTC) because they are in a Qualified Census Tract (QCT) area of particularly high contrast between incomes and housing costs. It says that formerly, under PIH Notice 2002-22, such projects were allowed to charge higher rents (i.e. Sec. 8 would have paid them higher subsidies) up to the lower of two amounts: the unassisted rent for comparable units in the area, or 110% of the year's HUD-determined "Fair Market Rent" for the area. Outside QCTs, the rule was the same except that the formula-determined LIHTC rent amount had to be used instead if it was lower than the other two amounts. Nixon Peabody says the new rule, however, overrides 2002-22 -- having done so without a public comment process -- and provides that all LIHTC projects receiving project-based voucher assistance, in or out of QCTs, have to cap their rents at the formula-determined LIHTC rent amount, even if that is lower than the official "Fair Market Rent" or the rent at the similar private complex next door.
The second item highlights a Nov. 1 final rule from the EPA that it says should be understood by "anyone who anticipates buying real estate." It explains that the new rule lays out stricter new definitions of the assessments and research that purchasers of property must conduct in order to show they have made "all appropriate inquiries" about previous uses and neighbors of the property -- which they must do if they want to be protected from liability from later-discovered pollution hazards. The rule is effective next Nov. 1, 2006. The "Alert" refers readers to this EPA site, which explains both the rule and the formal process that led up to it. Nixon Peabody warns, "The Rule will have far-reaching effects on most large-scale real estate transactions, including most transactions involving multifamily housing developments."
The first item notes an important change that it says appeared quietly -- perhaps too quietly -- in last month's final rule on the use of project-based Section 8 vouchers. Updating its own previous posting on the subject, it says the rule has special importance for projects subsidized by project-based vouchers that also receive extra low-income housing tax credits (LIHTC) because they are in a Qualified Census Tract (QCT) area of particularly high contrast between incomes and housing costs. It says that formerly, under PIH Notice 2002-22, such projects were allowed to charge higher rents (i.e. Sec. 8 would have paid them higher subsidies) up to the lower of two amounts: the unassisted rent for comparable units in the area, or 110% of the year's HUD-determined "Fair Market Rent" for the area. Outside QCTs, the rule was the same except that the formula-determined LIHTC rent amount had to be used instead if it was lower than the other two amounts. Nixon Peabody says the new rule, however, overrides 2002-22 -- having done so without a public comment process -- and provides that all LIHTC projects receiving project-based voucher assistance, in or out of QCTs, have to cap their rents at the formula-determined LIHTC rent amount, even if that is lower than the official "Fair Market Rent" or the rent at the similar private complex next door.
The second item highlights a Nov. 1 final rule from the EPA that it says should be understood by "anyone who anticipates buying real estate." It explains that the new rule lays out stricter new definitions of the assessments and research that purchasers of property must conduct in order to show they have made "all appropriate inquiries" about previous uses and neighbors of the property -- which they must do if they want to be protected from liability from later-discovered pollution hazards. The rule is effective next Nov. 1, 2006. The "Alert" refers readers to this EPA site, which explains both the rule and the formal process that led up to it. Nixon Peabody warns, "The Rule will have far-reaching effects on most large-scale real estate transactions, including most transactions involving multifamily housing developments."
posted by Martha Bridegam at 12:10 PM
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