By Ariella Cohen, The Lens staff writer
A top Republican in the U.S. Senate is vowing to enhance a tax bill passed Wednesday to ensure that New Orleans housing developers don’t lose Gulf Opportunity Zone low-income housing tax credits.
Under the bill as it currently stands, the federal housing subsidy will expire on Jan. 1, 2012, one year later than the current deadline. But local, state and federal housing officials have argued for months that a longer extension is necessary because the national credit crisis made it impossible for housing developers to close on financing deals lately. One year may not be long enough for all 77 projects with credit deals that haven’t closed, they said.
Among the 77 are projects in St. Bernard, Jefferson and Orleans parishes, including the redevelopment of two of the Big Four public housing sites – Lafitte and B.W. Cooper.
In response to pleas for the revision from Louisiana Sens. Mary Landrieu, a Democrat, and David Vitter, a Republican, , Sen. Jon Kyl, R-Ariz., said Wednesday afternoon that he would work the Louisiana delegation “in early 2011 to help these projects obtain the necessary extension,” a transcript of dialogue on the Senate floor shows. The transcript was forwarded in an e-mail sent by Vitter’s staff.
Senate minority whip Kyl played a key role in negotiating the content of the $858 billion package that extends Bush-era tax cuts, as well as the Go Zone development incentives. The bill passed 81-19 and is now heading to the House for a vote, expected to happen before Friday, when President Barack Obama is expected to sign it into law.
While controversial elements brokered by Kyl, including a provision that allows estates as large as $10 million to pass to heirs tax-free, are extended two years under the bill, the senator said Wednesday that at the time when the bill “was being wrapped up… he could not” provide an extension longer than the one-year continuance provided. He did not explain why.
The desired change would apply only to housing projects whose developers have gotten underway with approvals for Go Zone tax credits, but still haven’t closed on a deal to sell the revenue-generating federal credits, Landrieu said.
“This is a technical correction… to finish the low-income housing projects in the Gulf Coast,” she said.
The 77 projects that stand to be affected by change would generate a total of 1,770 units across the region, 840 of which are included in the Lafitte and B.W. Cooper redevelopments.
Landrieu asked Senate Finance Committee Chairman Sen. Max Baucus, D-Mont.) if the change to the bill could be made in the first two months of the new year.
Baucus, though optimistic, declined to make a promise.
“I hope,” he said, quipping that the senator “knows how this place operates.”
The Montana Democrat’s hopes are shared by Louisiana officials as well the affordable-housing advocates and developers who are their constituents.
“A one-year extension will not solve our problem,” said Louisiana Housing Finance Authority Board Chairwoman Allison Jones. “A two-year extension is desperately necessary…We trust that Congress will listen to Louisiana’s leaders and keep our nation’s promise to rebuild our state by addressing this immediately in 2011.”