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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