Senate Finance Committee Chairman Max Baucus (D-Mont.) on Dec. 2 introduced the Middle Class Tax Cut Act of 2010, which includes extending several key affordable housing programs, including the tax credit exchange.
The bill also calls for extending the placed-in-service deadline for projects using the Gulf Opportunity (GO) Zone credit by two years. It also reauthorizes the New Markets Tax Credit program for two years.
Enterprise Community Partners, Inc., and others in the affordable housing industry called on the Senate to pass an earlier extenders bill that was introduced by Baucus in September. Many of the same measures in that bill are in the new proposal.
An extension of the GO Zone placed-in-service date is critical, according to Peter Lawrence, senior policy director for Enterprise. Enterprise estimates that more than 6,000 affordable homes, more than 14,000 related jobs, and $1 billion in construction activity are at risk if the Jan. 1, 2011, deadline isn’t extended.
The GO Zone credit is a resource that won’t be replaced, said Lawrence.
Affordable housing developers across the country are watching to see if the exchange program is also extended. Created under the American Recovery and Reinvestment Act, the program allows state housing agencies to swap their low-income housing tax credits (LIHTCs) for grants to finance affordable housing.
Although the LIHTC market has improved in recent months, there are still some regions that need the exchange program to get deals done, said Lawrence.