The good news: The U.S. Dept. of Treasury announced last week that Louisiana would receive $114 million as part of the American Recovery and Reinvestment Act (ARRA) Tax Credit Exchange program.
The bad news: GO Zone and Disaster Tax Credits are still being excluded from the exchange program.
Louisiana leaders are very pleased that the state will be receiving this sum of money, and they are certain that the funds will go to great use. These exchange dollars will be incorporated into the 2009 QAP and be distributed in lieu of Low-Income Housing Tax Credits to developments that may not be able to get proper syndication.
“This is wonderful news,” said LHFA President Milton Bailey. “The funds will be used in our continuing efforts to rebuild affordable housing in Louisiana. It will allow us to serve homeless and special needs populations, place residents residing in FEMA trailers into suitable rental accommodations and continue the process of recovering our hurricane displaced residents. We applaud President Obama for taking this first step toward meeting his campaign commitment of helping Louisiana and Gulf Coast communities recover in the wake of hurricanes Katrina, Rita, Gustav and Ike.”
U.S. Senator Mary Landrieu recognized the importance of this infusion of funds saying, "As federal and state agencies work toward long-term solutions, this $114 million investment from the Recovery Act will allow Louisiana to continue its effort to strategically rebuild and modernize workforce housing across our state."
Both leaders have pledged to continue working to include GO Zone and Disaster credits in the exchange program, and are hopeful that their efforts, and those of many others, will be recognized by Treasury.
"I will also continue to work with the Administration on ensuring disaster-impacted states such as Louisiana are able to fully utilize Recovery Act funding to spur redevelopment efforts," said Sen. Landrieu.
Pres. Bailey also commented, "We look forward to receiving the approval necessary from Treasury Secretary Geithner that will allow us to exchange our GO Zone and disaster credits under Section 1602 of ARRA as well."
Thursday, July 16, 2009
Wednesday, July 1, 2009
Legislative Movement
Last week, 2 pieces of legislation were introduced that could serve to rectify the exclusion of the GO Zone Tax Credits from the ARRA Tax Credit Exchange program.
The Disaster State Economic Recovery Act of 2009 (authored by Reps. Davis and Boustany), and its companion in the Senate, the Disaster State Housing Recovery Act of 2009 (authored by Sens. Bayh and Shelby), show bipartisan and bicameral concern for this issue.
While an administrative fix coming directly from Treasury would still be the most effective and efficient remedy, a legislative fix could be a possible solution; provided the wheels of Congress move quickly enough, given the deadlines that developers are facing.
As conversations with Treasury continue in order to persuade an immediate fix, all are encouraged to petition their elected officials to support these two pieces of legislation.
The Disaster State Economic Recovery Act of 2009 (authored by Reps. Davis and Boustany), and its companion in the Senate, the Disaster State Housing Recovery Act of 2009 (authored by Sens. Bayh and Shelby), show bipartisan and bicameral concern for this issue.
While an administrative fix coming directly from Treasury would still be the most effective and efficient remedy, a legislative fix could be a possible solution; provided the wheels of Congress move quickly enough, given the deadlines that developers are facing.
As conversations with Treasury continue in order to persuade an immediate fix, all are encouraged to petition their elected officials to support these two pieces of legislation.
Friday, June 19, 2009
Lights Shining on Efforts
The fight continues to make sure that the Gulf Coast rebuilding efforts are not completely undone by the current economic crisis. As many supporters have joined this effort, media outlets should be recognized as well for their coverage. By shining brighter lights on this issue, local and national media members have become valued partners.
Locally, the Baton Rouge Advocate has been monitoring the situation and keeping its readers up to date. On a national stage, the Bond Buyer has been following the cause closely. And earlier this month, the American Prospect magazine ran a story chronicling the efforts being made to make sure the GO Zone areas are included rather than excluded from the benefits of the stimulus plan.
It is our hope that very soon, these media outlets will have a very positive story to report, one of rebuilding and recovery.
Locally, the Baton Rouge Advocate has been monitoring the situation and keeping its readers up to date. On a national stage, the Bond Buyer has been following the cause closely. And earlier this month, the American Prospect magazine ran a story chronicling the efforts being made to make sure the GO Zone areas are included rather than excluded from the benefits of the stimulus plan.
It is our hope that very soon, these media outlets will have a very positive story to report, one of rebuilding and recovery.
Monday, May 25, 2009
Realtors Join Effort
Last week, the National Association of Realtors expressed their support of our initiative by submitting a letter to Treasury Secretary Geithner. The NAR is a national trade association of 1.2 million real estate professionals.
In a letter signed by 2009 NAR President Charles McMillan, the association adds its voice in requesting that the GO Zone Tax Credits be included in the Exchange Program as part of the American Recovery and Reinvestment Act.
This sentiment is shared by in impressive list of groups and individuals who realize the necessity of including the Gulf Coast region in this economic recovery effort.
In a letter signed by 2009 NAR President Charles McMillan, the association adds its voice in requesting that the GO Zone Tax Credits be included in the Exchange Program as part of the American Recovery and Reinvestment Act.
The clear intent of ARRA is to get our economy working again by among other things funding critical infrastructure. Affordable housing and community development is the most critical infrastructure to America’s families. For this reason, we ask that you strongly reconsider the exclusion of GO-Zone and other disaster related tax credit allocations from funding under ARRA.
This sentiment is shared by in impressive list of groups and individuals who realize the necessity of including the Gulf Coast region in this economic recovery effort.
Thursday, May 21, 2009
Encouraging step, but work still to be done
On May 14th, an encouraging step was taken on the Hill. As part of the supplemental spending bill, the Senate included language to make clear that HOME/TCAP funding in ARRA applies to GO Zone disaster credits. This is significant because the Senate recognized that GO Zone and disaster credits were inadvertently left out of ARRA and moved swiftly to correct the oversight.
However, the supplemental spending bill would not reverse Treasury's interpretation to exclude GO Zone credits from the exchange program. Thus, there is work left to be done, but progress has been made!
However, the supplemental spending bill would not reverse Treasury's interpretation to exclude GO Zone credits from the exchange program. Thus, there is work left to be done, but progress has been made!
Tuesday, May 12, 2009
Treasury's Ruling: More than tax credits and units
The socio-economic impact of Treasury’s ruling to exclude GO Zone Tax Credits from its Exchange Program extends beyond the sheer # of housing units and allocated tax credits. The decision affects other federal, state and private infrastructure and capital investments already made toward the development of workforce housing in such areas. Also to be considered are foregone construction and other trade jobs, job losses, losses to our business community and to the state’s tax base. Most importantly, the impact will most painfully be felt by the thousands of families in Louisiana still struggling to recover and who are still looking for an affordable, safe place to live.
The public policy implications of Treasury’s ruling is far reaching as well as it undermines the President’s pledge to help rebuild New Orleans, the Go Zone and other disaster areas. Moreover, the ruling constitutes an unjust taking of a public entitlement; denies GO Zone and other disaster states equal access to public funds under the American Recovery and Reinvestment Act; and denies the return of displaced residents to their homes. If allowed to stand, Treasury’s ruling would produce not just a roadblock to Louisiana’s recovery efforts, but in fact would be another man-made disaster that will prevent the housing and economic resurgence of similarly situated states.
To my colleagues in other Gulf and disaster states I would ask—what’s it costing you?
The public policy implications of Treasury’s ruling is far reaching as well as it undermines the President’s pledge to help rebuild New Orleans, the Go Zone and other disaster areas. Moreover, the ruling constitutes an unjust taking of a public entitlement; denies GO Zone and other disaster states equal access to public funds under the American Recovery and Reinvestment Act; and denies the return of displaced residents to their homes. If allowed to stand, Treasury’s ruling would produce not just a roadblock to Louisiana’s recovery efforts, but in fact would be another man-made disaster that will prevent the housing and economic resurgence of similarly situated states.
To my colleagues in other Gulf and disaster states I would ask—what’s it costing you?
GO Zone Tax Credits Left Out of Exchange Program
According to HUD and FEMA, Hurricanes Katrina and Rita severely damaged or destroyed 205,000 units of housing in the GO Zone. Three years later, approximately 10,000 homes were damaged or destroyed by Hurricanes Gustav and Ike. To help recover from these devastating events, Louisiana was awarded $170,277,822 in GO Zone Low Income Housing Tax Credits after Katrina and $3,070,816 in Disaster Credits after Ike. In order to spur recovery, the Louisiana Housing Finance Agency forwarded allocated all of these credits and at this time all of the GO Zone and Disaster LIHTCs awarded have been allocated.
As Gulf Coast and other disaster states were beginning the long road to recovery, the nation was battered by a national and global financial crisis. One of the casualties of this crisis was the value of tax credits. The federal government responded with the American Recovery and Reinvestment Act of 2009. As part of this act, the Treasury Department proposed a tax credit exchange program that would allow allocated tax credits to be monetized to help re-energize stalled developments. Unfortunately, Treasury is currently prohibiting the inclusion of GO Zone and Disaster Credits into this program.
All GO Zone and Disaster credit projects that are not placed-in-service, or have collapsing or failed syndications, could be adversely affected if not allowed to participate in Treasury’s exchange. Approximately 10,159 units or $126,620,559 in tax credits would be affected.
Where we Stand: the State’s Entire GO Zone/Disaster Areas
4,077 units placed-in-service = $47,322,161 in tax credits
3,742 units are under construction = $37,784,950 in tax credits
3,158 units have closed their transactions = $44,708,384 in tax credits
3,259 units have not closed their transactions = $44,127,225 in tax credits
As Gulf Coast and other disaster states were beginning the long road to recovery, the nation was battered by a national and global financial crisis. One of the casualties of this crisis was the value of tax credits. The federal government responded with the American Recovery and Reinvestment Act of 2009. As part of this act, the Treasury Department proposed a tax credit exchange program that would allow allocated tax credits to be monetized to help re-energize stalled developments. Unfortunately, Treasury is currently prohibiting the inclusion of GO Zone and Disaster Credits into this program.
All GO Zone and Disaster credit projects that are not placed-in-service, or have collapsing or failed syndications, could be adversely affected if not allowed to participate in Treasury’s exchange. Approximately 10,159 units or $126,620,559 in tax credits would be affected.
Where we Stand: the State’s Entire GO Zone/Disaster Areas
4,077 units placed-in-service = $47,322,161 in tax credits
3,742 units are under construction = $37,784,950 in tax credits
3,158 units have closed their transactions = $44,708,384 in tax credits
3,259 units have not closed their transactions = $44,127,225 in tax credits
If Treasury's determination is left to stand, the recovery efforts in Louisiana, and the rest of the Gulf Coast and Midwestern states affected by these disasters, could not only be set back but undone completely.
The Louisiana Housing Finance Agency and its valued partners have undertaken the arduous task of correcting this error. Please review the letters and memos that have been submitted by elected officials, housing professionals and concerned groups, and join us as we work to save our recovery efforts.
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