Owners of low-income housing tax credit (LIHTC) properties would have new options for estimating tenant utility costs under a set of proposed regulations being weighed by the Internal Revenue Service (IRS).
The long-awaited proposal comes after the IRS received comments from organizations representing owners, developers, tenants, nonprofit housing groups, housing credit agencies, and others, stating that the existing methods often result in flawed information being used for rent adjustments.
If utilities are paid by a tenant, a utility allowance must be built into the rent, meaning that an owner must deduct the estimated utility costs when establishing the rent that is charged to a tenant. The methods used for calculating the figures, however, tend to overestimate them. This could mean reduced rents to owners, which could ultimately hurt the financial feasibility of a project, said industry groups.
Owners say that the public housing authority (PHA) utility schedules that are often used do not reflect the proper usage of utilities for LIHTC units. This is because the PHA schedules are designed for Sec. 8 properties, which are older buildings with higher utility costs. LIHTC properties tend to be newer. Also, property owners are often unable to obtain local utility estimates due to a lack of data or an unwillingness on the part of the utility companies to provide information.
The IRS proposal would give property owners new options in estimating utility costs, including using estimates from LIHTC allocating agencies. Owners could also calculate utility allowances using the Department of Housing and Urban Development’s new utility modeling program.
HANO Settles Lawsuit
The Greater New Orleans Fair Housing Action Center and tenant Dasha Corner settled a lawsuit in July that claimed that the Housing Authority of New Orleans (HANO) and HRI Properties allowed HANO employees and other unqualified people to live in 63 units for about a year after Hurricane Katrina at a rate designed solely for low-income residents.
Corner claimed she was approved for a two-bedroom unit at River Garden Apartments, a HOPE VI development.
The property formerly was the site of the St. Thomas housing complex, which was demolished in 2000 and redeveloped as River Garden Apartments.
U.S. District Court Judge Peter Beer ordered that HANO and HRI Properties give preference to former St. Thomas residents at River Garden Apartments and detailed a rigorous application process. HANO and HRI deny any wrongdoing.
At press time, HRI was seeking to force HANO to pay court costs.
Foreclosure Prevention Campaign Launched
Neighborworks America and the Ad Council joined forces to launch a public awareness campaign aimed at preventing home foreclosures.
Television and radio public service announcements began airing in July, with print and Internet spots following.
The campaign urges homeowners in financial trouble to call (888) 995- HOPE. The Homeowner’s HOPE hotline, a counseling service provided by the Homeownership Preservation Foundation, is the cornerstone of a foreclosure prevention effort involving many of the country’s largest mortgage companies.
The foundation recently reported receiving about 750 calls a day.
“Homeowners are facing foreclosure at record rates,” said Colleen Hernandez, foundation president and executive director. “This issue reaches into every social and economic demographic out there, and homeowners facing delinquency need to remember that they’re not alone.”
The hotline received 30,000 calls in the second quarter of 2007, double the amount of calls received in the first quarter.
Employers Feel the Lack of Affordable Housing
A Shortage of affordable housing often means that workers have to commute longer distances to get to work.
This is a concern for the business community, especially larger employers, according to survey results released by the Urban Land Institute.
The survey was taken to gauge perceptions by employers and commuters regarding the impact of long distances between housing and jobs on business operations and workers’ quality of life.
More than 300 firms from across the nation responded. The survey polled employers from three groups: those with fewer than 50 employees, those with 50 to 100 employees, and those with more than 100 employees. The largest companies consistently reported the greatest awareness of problems resulting from long commutes and the lack of affordable housing, including high turnover.
The survey found that:
- 55 percent of the firms with 100-plus employees reported a lack of affordable housing near their location.
- 67 percent of the larger companies that acknowledged a lack of affordable housing believe that it is having a negative impact on their ability to retain qualified entry- and mid-level employees.
- 58 percent of the larger companies reported having lost employees at least in part due to long commutes.
- 69 percent of the larger companies believe a long commute time increases employee stress; 63 percent believe it triggers negative emotions; 48 percent said it causes more absenteeism; and 46 percent said it contributes to employee turnover.
- 36 percent of the larger companies believe it is important to be actively involved in providing employee access to affordable housing.
McKinney Act Turns 20
Advocates for the homeless marked the 20th anniversary of the Stewart B. McKinney Homeless Assistance Act in July.
The act, which was later renamed the McKinney-Vento Homeless Assistance Act in honor of the late Rep. Bruce Vento (D-Minn.), was intended to be the first step in addressing homelessness. Twenty years later, it remains the only major coordinated federal response to the problem, according to the National Law Center on Homelessness & Poverty.
Advocates passed out bittersweet chocolate bars to members of Congress to mark the anniversary as well as call for continued support. The House of Representatives passed a resolution recognizing the act in July.
The Department of Housing and Urban Development reported that McKinney-Vento programs administered by the department this year will award about $1.5 billion to support local housing and service programs.