We are so excited to share some great news from Washington! In today’s budget deal that was announced today and details released this hour, the following changes are made to the Low Income Housing Tax Credit (LIHTC) that will greatly benefit affordable housing development and preservation in New York and across the nation.
INCOME AVERAGING IS NEW LIHTC OPTION!
Income Averaging has been one of NYHC’s top policy priorities and we have been fighting hard for this legislative change that will help us serve more very low-income families without additional subsidy. The Low Income Housing Tax Credit will now have an option in which the upper income limit is raised from 60% to 80% of area median income (AMI), as long as the average income is no more than 60% AMI across all units. This will be extremely beneficial to creating mixed-income housing and deeper affordability levels that communities have been clamoring for! To learn more about the benefits of Income Averaging and the associated cost savings, see our infographic.
12.5% LIHTC INCREASE
This means more housing credits for New York and increased investment in affordable housing. States will receive a temporary 12.5% allocation increase in years 2018 through 2021. This only partially offsets the loss of equity resulting from the lower corporate tax rate but it certainly helps. Nationally, it is expected to finance 30,000 more units partially offsetting the loss of 235,000 units resulting from the tax bill according to Novogradac.
HUD BUDGET INCREASE
There are significant funding increases to some HUD programs. New vouchers will improve our ability to combat homelessness and HOME increases will support new rental housing for very low-income families. There is also a significant increase to Public Housing Capital funds which will help make repairs residents deserve. Here is preliminary analysis comparing to FY 2017 levels. Please look out for any updates and corrections tomorrow.
Public Housing- Capital increases from 1.942 billion to 2.75 billion. This increase is desperately needed and welcome news! Operating sees a slight increase. Jobs Plus is funded for 15 million.
HOME- After significant cuts, HOME is increased from 950 million to 1.362 billion. Great news for support and senior housing!
CDBG- Block grants increase from 3 billion to 3.3 billion.
Homeless Grants- Receive a modest increase.
Section 8- Both tenant based and project based see increases that look sufficient to fund existing vouchers and maybe also fund a small amount of new vouchers. Special allocations are also made for VASH vouchers (40 million) and Family Unification Vouchers (20 million)- these programs are critical to ending homelessness.
This budget deal is wonderful news given the abysmal funding levels proposed in the President’s budget. We will report back on full details of the bill and impact for New York after we review the Omnibus more thoroughly. Click here for an opportunity to attend our federal housing policy symposium next week which will include two panel discussions on these changes and others on the horizon.