Just a couple weeks ago, affordable-housing proponents had little hope that developments to replace the public-housing complexes torn down after the levee failures would materialize.
A damning federal assessment of the Housing Authority of New Orleans stated that, “Two of HANO’s Big Four the former Lafitte and B.W. Cooper projects mixed-income deals are in jeopardy. Lafitte and B.W. Cooper risk not moving forward as planned if Congress does not pass a Placed-in-Service extender bill in the immediate future.”
Such a move would give developers more time to close their deals and get their developments off the ground with the help of low income housing tax credits, which are due to expire at the end of this year. The U.S. Senate did just that as it passed the American Workers, State, and Business Relief Act, a $130 billion dollar bill known nationally for extending unemployment benefits. Locally it’s likely to be known for its provision to not only give Gulf states the much needed extension of the placed-in-service dates, but also lets the state exchange its tax credits for cash through the federal stimulus program.
“Without this bill, the critical housing reconstruction projects that are under way would be shut down,” said Sen. Mary Landrieu, D-La, who helped secure the measure in the bill.
Sen. David Vitter, R-La., did his part to secure the tax-credit exchange – considered a long shot by many.
“Allowing disaster housing credits to be exchanged, along with the two-year extension in the placed-in-service deadline, will allow much needed housing developments to move forward,” Vitter said in a press release.
Many housing advocates and elected officials had been pushing for the extension, which seemed like the most likely option open to Congress. However, the extension would have meant little if developers were not able to cash in their low-income housing tax credits. The tax credits waned and depreciated during the financial market crisis leaving the fate of developments such as the former Lafitte and B.W. projects looking futureless.
When the stimulus was passed, it allowed for low-income housing tax credits to be exchanged for cash due to the financial crisis. But in a discretionary move by Treasury Secretary Timothy Geithner, Gulf Opportunity Zone low-income housing tax credits were excluded. While a bipartisan Louisiana delegation – at both state and federal levels – pushed for the exchange, Geithner wouldn’t budge, leaving a legislative fix as the last recourse.
The Senate provisions still need to go through the House, and ultimately need President Barack Obama’s approval.
The state, particularly the Louisiana Housing Finance Agency, which administers the GO Zone tax credits, is optimistic.
“We are very pleased with this vote from the Senate,” said agency President Milton Bailey. “Louisiana and the other Gulf States were dealt dual blows: first by the hurricanes of 2005, and then by the recent economic crisis. The GO Zone tax credits are an integral part of the Gulf’s rebuilding efforts, but the landscape has changed since they were first instituted in 2006. We are very grateful that these needed changes were made so that we can continue our rebuilding efforts.”
Read Lens other coverage of this issue:
“Louisiana hit hard, but not among ‘hardest hit’” http://thelensnola.org/archives/3932
“Forgiveness as policy” http://thelensnola.org/archives/3560
“Judge sympathetic, but dismisses complaint about housing money shifted to port” http://thelensnola.org/archives/3460
“Lens Transcript: Louisiana Housing Chief Milton Bailey” http://thelensnola.org/archives/2958
“BGR President: ‘Inaccurate’ to say too much affordable housing” http://thelensnola.org/archives/3055