As we inch into 2013, there has been a lot of recent positive momentum for the affordable housing industry.
On the equity side, the fixed rate for the 9 percent low-income housing tax credit (LIHTC) has been extended, and we’re seeing the LIHTC equity market becoming more stable. In our annual syndicator survey, most of the respondents said they are more optimistic than they were a year ago.
On the debt side, more lenders made more capital available to affordable housing in 2012. Even though the low interest rates won’t last forever, lending activity should continue to be busy in 2013 with a focus on recapitalizing and refinancing projects that are nearing or hitting year 15.
But even with the positive news, there’s uncertainty lurking down the road: deficit reductions, possible sequestration cuts, and tax reform.
In President Obama’s State of the Union address in February, he emphasized deficit reductions and comprehensive tax reform. “Now is our best chance for bipartisan, comprehensive tax reform that encourages job creation and helps bring down the deficit. The American people deserve a tax code that helps small businesses spend less time filling out complicated forms, and more time expanding and hiring; a tax code that ensures billionaires with high-powered accountants can’t pay a lower rate than their hard-working secretaries; a tax code that lowers incentives to move jobs overseas, and lowers tax rates for businesses and manufacturers that create jobs right here in America. That’s what tax reform can deliver. That’s what we can do together,” he said.
This could have overwhelming effects for the LIHTC and other housing programs. Industry leaders are urging that this is the time for owners and developers to be proactive in spreading the message of the successes of the LIHTC program to legislators and their staffs and not a time to become complacent.
Every industry associated with tax expenditures will be lobbying Congress. Developers and owners have the opportunity to tout the LIHTC program by providing Congress with a firsthand look at these developments and sharing the personal stories of how this housing has transformed residents’ lives. The affordable housing industry’s advocacy efforts can make a difference.
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Affordable Housing Finance is also giving you an opportunity to showcase your recent developments. Our annual Readers’ Choice Awards focus on projects that were completed in 2012 or will be completed in 2013 that have made an impact on a community by adding substantially to the affordable housing stock or improving the immediate social or economic fabric; have a role in overall community revitalization or social change; employ cost-effective or innovative design; and offer outstanding social services for residents.
Go to www.housingfinance.com to download the entry form. Complete entries with photos and sources and uses of financing are due March 29.
