Latest news with #LIHTC
Business Wire
6 days ago
- Business
- Business Wire
NMHC Statement on FHFA Announcement that the LIHTC Cap Will be Raised
WASHINGTON--(BUSINESS WIRE)--NMHC is pleased to hear that the Federal Housing Finance Agency (FHFA) is authorizing each GSE to annually purchase up to $2 billion in Tax Credit Equity, an increase from their current $1 billion limit, for a combined increase of $2 billion. This significant move will improve housing affordability and expand housing opportunities for those most in need. NMHC appreciates the Trump Administration's commitment to lowering housing costs by expanding housing supply. 'This step by FHFA is great news for housing providers seeking to use LIHTC to build and preserve housing, as well as individuals and families searching for affordable housing opportunities,' said NMHC President Sharon Wilson Géno. 'As someone who has spent more than 30 years working in and advocating for the affordable housing community, I have seen firsthand how LIHTC can be one important tool to help us build the housing America needs.' LIHTC is currently the nation's premier affordable housing production and preservation program. The public-private partnerships created through LIHTC leverage federal dollars with private investment to build affordable rental housing and stimulate new economic development in many communities. Since its inception in 1986, the LIHTC program has financed 4 million apartments and served more than 9.28 million households. This announcement builds on additional good news for LIHTC in the recently enacted reconciliation legislation that permanently enhanced LIHTC authority. The LIHTC changes in the new law are projected to result in 1.22 million additional affordable homes being built or preserved over the next decade. Learn more about LIHTC. Based in Washington, D.C., the National Multifamily Housing Council (NMHC) is where rental housers and suppliers come together to help meet America's housing needs by creating inclusive and resilient communities where people build their lives. We bring together the owners, managers, developers and suppliers who provide rental homes for 40 million Americans from every walk of life—including seniors, teachers, firefighters, healthcare workers, families with children and many others. NMHC provides a forum for leadership and advocacy that promotes thriving rental housing communities for all. For more information, contact NMHC at 202/974-2300, email the Council at info@ or visit NMHC's website at
Forbes
7 days ago
- Business
- Forbes
Property Tax Reductions Can Yield Affordable Multifamily Housing
Reducing or eliminating property tax for projects that include some affordable housing set asides has become a common practice in the United States. The policies and programs are based on the correct assumption that when costs to produce housing go up, so do prices and rents. Property tax is not a trivial element of the costs of producing and operating housing. Building housing increases the value of property, and that increase in value results in higher taxes and operating costs, often dampening incentives to make improvements. Tax abatement and exemption programs to reverse this effect and create incentives take different forms. This brief survey is based on an analysis done by the Mortgage Bankers Association (MBA) of tax abatement and exemption programs for housing across the country. Property Tax Reductions for Non-Profit Affordable Housing Some states, including Alabama, Arizona, California, Hawaii, Oregon, and South Carolina, have abatement programs that have tax abatements for non-profits that provide affordable housing at varying income levels. Alabama exempts projects that meet the Department of Housing and Urban Development's Section 202 requirements, and house senior citizens. Arizona offers a property tax exemption for non-profit organizations that have housing under a restrictive covenant, something typical of Low Income Housing Tax Credit (LIHTC) projects. In Texas, property tax exemptions are available for Public Facility Corporations, non-profit entities created by local government. Property Tax Reductions for Mixed-Income or Workforce Housing A classic example of these sorts of programs is Seattle's Multifamily Tax Exemption (MFTE) program which provides an exemption on improvements to property if the improvement is housing with a set aside of 20% of the units at up to 80% of Area Median Income with a 12 year affordability requirement. The program has produced thousands of affordable units over its decades of operation. Washington DC has a geographic, formula driven abatement that grants a tax abatement equal to 75% of the improved value of the property provided that the development sets aside 5% of the units for low-income households and 10% up to 60% of AMI. The tax abatement lasts for 10 years but the affordability requirement lasts for 20. Other jurisdictions like Tillamook, Oregon and Montgomery, County in Maryland offer similar exchanges of set aside units for an exemption. Historic Rehabilitation & Redevelopment Property Tax Reductions Some jurisdictions offer exemptions for development projects that rehabilitate older, existing buildings. These include Georgia which provides an 8-year abatement, Philadelphia, with a 10-year abatement, Norfolk, Virginia with a 14-year abatement, and New York City with an abatement that can be as long as 34 years. These programs require improvements to properties that either currently provide housing or include some housing component, but none of them appear to have any affordability requirement. The MBA seems to have included them because they are exemption programs that create housing. I'm including them here because these sorts of exemption programs arguably create or preserve housing supply which arguably contributes to affordability. We'll return to this discussion later. Transit-Oriented PropertyTax Reductions Putting more housing near transit, especially light rail stations, is a priority for jurisdictions that have invested in more rail infrastructure. Oregon's Multiple Unit Housing Property Tax Exemption (MUPTE) program offers 10-year exemptions for projects that are adjacent to light rail or transit and include some level of affordability. What each of these approaches has in common is a recognition that the increases in value created by new development create tax consequences that can disincentivize making the improvements in the first place. The concept behind property tax abatement for affordable housing is that reductions in taxes should result in some community benefit, whether in the form of rent restricted housing or more housing of any level of rent. Usually, jurisdictions have to balance the loss of tax revenue with the quantitative benefits of the improvements either in more affordable housing, increased future tax income, or both. Next, we'll take a closer look at a couple of abatement programs, how they work, and whether they've succeeded.
NBC News
29-07-2025
- Business
- NBC News
Real estate developers say affordable housing could soon become more profitable
Whether it's in the for-sale or rental market, the affordable housing crisis is only getting worse. There is simply not enough supply, especially in the apartment market, where developers have said it's just too expensive to put up quality, low-income housing. They cite rising costs for land, materials and labor, as well as increasingly restrictive zoning regulations. So-called NIMBYism (an acronym for 'not in my backyard'), is also on the rise, with residents fighting affordable housing in their neighborhoods, where home values have soared in the past five years. 'This is a tough time, I think. All of real estate is being challenged by higher interest rates and by higher construction costs, and, by the way, the building department requirements and all the frictions that are making real estate difficult,' said Jonathan Rose, founder and CEO of the Jonathan Rose Companies, a real estate planning, development and investment firm. 'But there's also a lot of support, and our job is to weave the pathway in between the complexities, the challenges and the opportunities and find the pathway through,' he said. Developers like Rose just got some more of that support from the recently passed tax and spending bill. It expanded the Low-Income Housing Tax Credit, by increasing the amount of credits available and lowering the financing requirements. Specifically, the legislation permanently increased the 9% credit allocation to states by 12%. Developers sell these credits to investors in order to help finance their projects. 'It's a big boost for the creation of more affordable housing. In fact, the United States has a shortage of about 10 million units. This won't solve the whole 10 million unit problem, but it'll be a big help,' said Rose, adding that he sees a growing opportunity for investors in the space. Affordable housing advocates applauded the bill's passage, saying that the LIHTC remains the nation's most effective tool for building and preserving affordable rental housing. 'This legislation delivers a significant expansion of the credit by incorporating key elements of the Affordable Housing Credit Improvement Act, aimed at boosting the supply of rental homes across urban, rural and tribal communities,' said David Dworkin, president and CEO of the National Housing Conference, in a release. Dworkin pointed both to the expansion of the credit as well as changes to another tax credit for developers that would make it easier to qualify for the benefit. 'Together, these changes are expected to produce or preserve more than 1 million additional affordable rental homes between 2026 and 2035,' Dworkin said. There does appear to be strong investor demand in the affordable space, both in new development and renovation. The Jonathan Rose Company recently closed a $660 million impact fund, 'dedicated to acquiring, preserving, and enhancing affordable and mixed-income multifamily housing in high-demand urban markets across the United States,' according to a release. Rose said he is seeing increased interest in housing-related investments from family offices and foundations. There is, however, a new wrench in the works. The Trump administration has proposed a $27 billion cut in federal rental assistance programs for low-income tenants. That is reportedly already causing some lenders to pull back. The cut would need to be approved by Congress, and Rose notes that the House has had longstanding bipartisan support for funding affordable housing. To his point, the Senate Committee on Banking, Housing and Urban Affairs announced Friday it is moving forward on new bipartisan legislation to expand housing supply and address affordability. The package includes removing regulatory barriers to housing development and providing funds for communities that are building more housing that can be used for water and sewer infrastructure. The legislation, however, is aimed more at making for-sale housing more affordable and less at helping build more low-income rental housing. And even still, the new tax incentives for rentals won't help NIMBYism, which appears to be rising right along with home values. Even mixed-use buildings, which have a small percentage of units designated as affordable, are seeing pushback from neighbors concerned that any such housing will damage current and future home values. Even before its expansion, the LIHTC gave developers incentives for more mixed-income buildings, with certain units designated for affordable housing and others at higher price points. Rose said this type of higher-quality, better designed, greener developments benefit owners in the long run by lowering operating and capital costs. 'One of the reasons why communities oppose affordable housing is because a lot of affordable housing — it was built in the '60s, '70s and early '80s — was cheap and ugly, and I wouldn't want it in my neighborhood either,' said Rose. 'We're deeply committed to creating beautiful buildings.'
CNBC
29-07-2025
- Business
- CNBC
Real estate developers say affordable housing could soon become more profitable
Whether it's in the for-sale or rental market, the affordable housing crisis is only getting worse. There is simply not enough supply, especially in the apartment market, where developers have said it's just too expensive to put up quality, low-income housing. They cite rising costs for land, materials and labor, as well as increasingly restrictive zoning regulations. So-called NIMBYism (an acronym for "not in my backyard"), is also on the rise, with residents fighting affordable housing in their neighborhoods, where home values have soared in the past five years. "This is a tough time, I think. All of real estate is being challenged by higher interest rates and by higher construction costs, and, by the way, the building department requirements and all the frictions that are making real estate difficult," said Jonathan Rose, founder and CEO of the Jonathan Rose Companies, a real estate planning, development and investment firm. "But there's also a lot of support, and our job is to weave the pathway in between the complexities, the challenges and the opportunities and find the pathway through," he said. CNBC's Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox. Subscribe here to get access today. Developers like Rose just got some more of that support from the recently passed tax and spending bill. It expanded the Low-Income Housing Tax Credit, by increasing the amount of credits available and lowering the financing requirements. Specifically, the legislation permanently increased the 9% credit allocation to states by 12%. Developers sell these credits to investors in order to help finance their projects. "It's a big boost for the creation of more affordable housing. In fact, the United States has a shortage of about 10 million units. This won't solve the whole 10 million unit problem, but it'll be a big help," said Rose, adding that he sees a growing opportunity for investors in the space. Affordable housing advocates applauded the bill's passage, saying that the LIHTC remains the nation's most effective tool for building and preserving affordable rental housing. "This legislation delivers a significant expansion of the credit by incorporating key elements of the Affordable Housing Credit Improvement Act, aimed at boosting the supply of rental homes across urban, rural and tribal communities," said David Dworkin, president and CEO of the National Housing Conference, in a release. Dworkin pointed both to the expansion of the credit as well as changes to another tax credit for developers that would make it easier to qualify for the benefit. "Together, these changes are expected to produce or preserve more than 1 million additional affordable rental homes between 2026 and 2035," Dworkin said. There does appear to be strong investor demand in the affordable space, both in new development and renovation. The Jonathan Rose Company recently closed a $660 million impact fund, "dedicated to acquiring, preserving, and enhancing affordable and mixed-income multifamily housing in high-demand urban markets across the United States," according to a release. Rose said he is seeing increased interest in housing-related investments from family offices and foundations. There is, however, a new wrench in the works. The Trump administration has proposed a $27 billion cut in federal rental assistance programs for low-income tenants. That is reportedly already causing some lenders to pull back. The cut would need to be approved by Congress, and Rose notes that the House has had longstanding bipartisan support for funding affordable housing. To his point, the Senate Committee on Banking, Housing and Urban Affairs announced Friday it is moving forward on new bipartisan legislation to expand housing supply and address affordability. The package includes removing regulatory barriers to housing development and providing funds for communities that are building more housing that can be used for water and sewer infrastructure. The legislation, however, is aimed more at making for-sale housing more affordable and less at helping build more low-income rental housing. And even still, the new tax incentives for rentals won't help NIMBYism, which appears to be rising right along with home values. Even mixed-use buildings, which have a small percentage of units designated as affordable, are seeing pushback from neighbors concerned that any such housing will damage current and future home values. Even before its expansion, the LIHTC gave developers incentives for more mixed-income buildings, with certain units designated for affordable housing and others at higher price points. Rose said this type of higher-quality, better designed, greener developments benefit owners in the long run by lowering operating and capital costs. "One of the reasons why communities oppose affordable housing is because a lot of affordable housing – it was built in the '60s, '70s and early '80s – was cheap and ugly, and I wouldn't want it in my neighborhood either," said Rose. "We're deeply committed to creating beautiful buildings."
Business Wire
28-07-2025
- Business
- Business Wire
Western Alliance Bank Teams Up With FHLBank San Francisco to Award the Yavapai-Apache Nation $800,000 Grant
PHOENIX--(BUSINESS WIRE)-- Western Alliance Bank today announced, in collaboration with the Federal Home Loan Bank of San Francisco (FHLBank San Francisco), an $800,000 grant awarded to the Yavapai-Apache Nation to support capacity building for affordable housing development. Western Alliance Bank Teams Up With FHLBank San Francisco to Award the Yavapai-Apache Nation $800,000 Grant This grant funding will support Yavapai-Apache Nation Tribal Housing (YANTH)'s construction of Yavapai-Apache Homes IX. This 38-unit new construction project offers a mix of two-bedroom duplexes and three- and four-bedroom single-family homes on Tribal trust land in the Tunlii community on the Yavapai-Apache Reservation in Camp Verde, Arizona. 'Western Alliance Bank recognizes that it is essential for Tribal members to have a safe, affordable place to call home,' said Aidan Tracey, assistant vice president of portfolio management for Western Alliance Bank's Affordable Housing Investments Group. 'There is strong demand for quality, affordable housing for members of the Yavapai-Apache Nation. We are proud to play a role in securing the well-being and stability of these communities with this step toward addressing housing needs for the Nation.' In this phase of the project, 14 units are designated for households with annual incomes up to 30% of Area Median Income (AMI), 11 units for households with annual incomes up to 50% AMI, five units for households with annual incomes up to 60% AMI, and eight units for households up to 80% AMI. The Project also includes a community center for resident use. All of the units are committed for eventual tenant ownership at the end of the 15-year Low-Income Housing Tax Credit (LIHTC) compliance period. As a member bank of the FHLBank San Francisco, Western Alliance Bank sponsored the Yavapai-Apache Nation's application to help secure this much-needed funding. Acting in a fiduciary capacity, the Western Alliance Affordable Housing Investments Group supported the Nation by facilitating the disbursement of funds, ensuring compliance with program requirements. The grant was made possible through voluntary funding from FHLBank San Francisco, which supports affordable housing and economic development in local communities across Arizona, California and Nevada. Western Alliance Bank remains committed to building strong local partnerships that support affordable housing, economic development and financial empowerment in our communities. About Western Alliance Bank With more than $85 billion in assets, Western Alliance Bancorporation is one of the country's top-performing banking companies. Its primary subsidiary, Western Alliance Bank, Member FDIC, offers a full spectrum of tailored commercial banking solutions and consumer products, all delivered with outstanding service by banking and mortgage experts who put customers first. Major accolades include being ranked as a top U.S. bank in 2024 by American Banker and Bank Director and receiving #1 rankings on Extel's (formerly Institutional Investor's) All-America Executive Team Midcap Banks 2024 for Best CEO, Best CFO and Best Company Board of Directors. Serving clients across the country wherever business happens, Western Alliance Bank operates individual, full-service banking and financial brands with offices in key markets nationwide. For more information, visit Western Alliance Bank. About FHLBank San Francisco The Federal Home Loan Bank of San Francisco is a member-driven cooperative helping local lenders in Arizona, California, and Nevada build strong communities, create opportunity, and change lives for the better. The tools and resources we provide to our member financial institutions — commercial banks, credit unions, industrial loan companies, savings institutions, insurance companies, and community development financial institutions — propel homeownership, finance quality affordable housing, drive economic vitality, and revitalize whole neighborhoods. Together with our members and other partners, we are making the communities we serve more vibrant and resilient. About the Yavapai-Apache Nation The Yavapai-Apache Nation is a federally recognized tribal government located in the Verde Valley of central Arizona, encompassing five tribal communities: Tunlii, Middle Verde, Rimrock, Camp Verde and Clarkdale. With approximately 2,600 enrolled members, the Nation is committed to strengthening the well-being of its people through investments in housing, healthcare, education and cultural preservation.
