The low-income housing tax credit (LIHTC) industry is in for a battle next year as a new Congress takes office.
Approximately 100 freshman members, many of them bent on slashing federal programs, will make up the 112th Congress. Many will be unfamiliar with the housing tax credit, so “education is everything,” according to David Gasson, vice president at Boston Capital and executive director of the Housing Advisory Group.
Speaking at the “News from the Capitol” session at AHF Live: The 2010 Affordable Housing Developers’ Summit in Chicago in early November, he provided the audience with an analysis of the midterm elections that were held two days earlier.
It will be critical to get elected officials out to affordable housing developments so they can see the program at work. In addition to highlighting the importance of the housing itself, supporters should also emphasize the economic impact and the jobs created by the LIHTC program, said Gasson and others.
Economists at the National Association of Home Builders (NAHB) estimate that the construction of 100 multifamily housing units creates 116 jobs.
The NAHB thinks 2011 is going to be a turnaround year for the LIHTC program, according to Sharon Dworkin Bell, senior vice president, multifamily and 50+housing.
Tax credit production is expected to be about 47,000 units this year. That number will increase to 55,000 in 2011 and then to 79,000 in 2012.
On another front, key housing legislation remains in limbo. Congress recessed for the midterm elections without passing the tax extenders bill, S. 3793. In addition to extending the LIHTC exchange program for one year, the bill would extend the New Markets Tax Credit for another year. It also calls for a two-year extension of the Gulf Opportunity Zone low-income housing placed-in-service date, said Ronne Thielen, managing director at Centerline Capital Group.
