TAX CREDITS CREATE AFFORDABLE RENTAL HOUSING - 6

TAX CREDITS CREATE AFFORDABLE RENTAL HOUSING

By Steve Wright

The Trust says the legislation would:

• Lessen the rule that lowers tax benefits dollar-for-dollar according to the amount of credit taken when using the historic rehab credit.
• Increase the rehab credit rate to 40 percent for smaller projects in which the qualified rehabilitation expenditures do not exceed $2 million. This would target the incentive to “main street” type developments in which rehab credit costs are currently prohibitive.
• Permit the 10 percent credit to be claimed with respect to residential rental property. It is currently prohibited for projects that include dwellings.
• Change the definition of “older building” from “built before 1936” to any property “fifty years old or older.”
• Ease the rules governing non-profit deals so that more community-oriented projects may move forward.
• Boost by 130 percent the qualified rehabilitation expenditures on which the rehab credit can be claimed for buildings located in certain disinvested neighborhoods, difficult to develop areas and census tracts with high poverty rates.
• Remove the recapture clause -- requiring the payback of tax credits upon conversion of a tax credit property into a condo development -- to broaden the tax credit's use to condominium developments and in so doing, provide new support for the revitalization of urban neighborhoods nationwide.