Rep. Barney Frank (D-Mass.) wants the government to spend $10 billion to help stalled housing projects, according to The Boston Globe.
Frank is proposing that the U.S. Treasury buy $5 billion in low-income housing tax credits (LIHTCs) and provide states with another $5 billion to spend on stalled deals, said the newspaper.
The Congressman wants to include the proposals in a new economic stimulus bill.
Frank’s not the only elected official aware of the LIHTC market woes. New York Gov. David Paterson recently sent a letter to President-elect Barack Obama offering an agenda for federal aid to states.
In the Dec. 29, 2008, leter, he cites how the state housing division has an unfunded capital projects pipeline approaching $639 million, comprised of 52 proposed projects. The pipeline includes 14 projects at an advance stage of readiness, according to the letter. If funded, these projects could start construction or rehabilitation within 180 days.
Paterson urges Obama to assist state housing finance agencies with their LIHTC programs and suggests several moves, including temporarily reducing the credit period from 10 to five years, permitting a “carryback” of the housing credit for up to five years and allowing the credits to be used to offset alternative minimum tax liability during that period, and expanding Community Reinvestment Act (CRA) footprints by 25 percent for two to three years to encourage financial institutions to invest in areas where they do not currently have a CRA need.