Tax Credits prioritize green and supportive housing

Alison Recca-Ryan of CSH referred us to this article, “2008 QAPs Push Green Policies: Fewer units being produced with tax credits” in the December issue of Affordable Housing Finance. To read the full article click here.

The article focuses on how Qualified Allocation Plans are focusing on building green, how increased costs are resulting in fewer units and what some states are doing to “develop more permanent supportive housing for the homeless and for other special-needs populations.”

This is a brief portion of the article.

The “greening” of QAPs is one of the big themes to emerge in the 2008 plans. A survey of state housing finance agencies also found a number of states making moves to encourage the development of supportive housing and revealed growing interest in preservation projects in several states.

Another huge issue is the increasing cost of development.

The gap financing sources have not grown along with increasing costs, said Jonette Hahn, a principal with the Reznick Group, who analyzed a majority of the surveys for AFFORDABLE HOUSING FINANCE. In 2007, allocators on average reserved about 13 percent more credits per unit than in 2006, and about 25 percent more than in 2005, said Hahn.

In 2007, the average amount of credits reserved per unit was $10,284.

Hahn also noted that state agencies on average are estimating that the price per dollar of tax credit will fall approximately 1 cent in 2008 from this year. State agencies said the median price per dollar of tax credit was 92 cents in 2007.

Several leading tax credit syndicators predict the decline in pricing will be even greater, making it tougher for developers

to pencil out deals.

To read the full article click here.