The Senate unanimously approved an amendment to extend the placed-in-service deadline for workforce housing developments in the Gulf Opportunity (GO) Zone.
The extension is needed to ensure that public housing reconstruction in Louisiana, Mississippi, and Alabama in the wake of hurricanes Katrina and Rita is not unnecessarily halted, said Sen. Mary Landrieu (D-La.).
Her amendment extends the GO Zone low-income housing tax credit (LIHTC) placed-in-service date from Jan. 1, 2011, to Jan. 1, 2013. Without this extension, almost 6,200 Gulf Coast units are unlikely to be completed and an estimated 13,000 construction-related jobs are in jeopardy.
“The housing market crash delayed GO Zone construction progress, and as a result, the completion deadlines were unrealistic and impossible to make, despite our best efforts,” Landrieu said in a statement. “Extending the placed-in-service deadline will ensure that construction of more than 6,000 housing units is not abandoned and that working families in south Louisiana have a place to call home. Turning our backs on these housing developments would be a devastating setback for hurricane recovery, and one Louisiana cannot afford.”
Landrieu secured support for the extension from the Department of Housing and Urban Development (HUD) and the Treasury Department. In a joint letter to Sen. Landrieu, HUD Secretary Shaun Donovan and Treasury Secretary Tim Geithner urged Congress to extend the GO Zone placed-in-service date by two years.
Overall, Congress provided Louisiana, Mississippi, and Alabama $323 million in LIHTCs to rebuild from the 2005 storms. To date, 77 projects with more than $80 million of tax credits at stake have yet to be placed in service. Without this extension, the Gulf Coast would lose more than $1 billion in economic activity, not to mention thousands of jobs. The construction industry, suppliers, professionals, developers, and those families seeking affordable housing would all be negatively affected.
These outstanding projects yet to be placed in service include 3,300 units in Louisiana and include projects at the Housing Authority of New Orleans (HANO)–specifically the B.W. Cooper and Lafitte public housing sites, which are so crucial to redevelopment in the New Orleans area. In particular, HANO received almost $500 million in federal funds to redevelop 4,500 apartments in the four biggest public housing developments in the city (B.W. Cooper, Lafitte, St. Bernard, and C.J. Peete). It estimated that 1,800 of the remaining 3,300 units in Louisiana are part of the “Big Four.” The Big Four also has approximately $33.4 million–or almost 70 percent–of the remaining $47.9 million of unused GO Zone tax credits.