“My administration is committed to expanding housing options for our most vulnerable citizens as part of our long-term, comprehensive plan to combat homelessness,” said Governor Chris Christie. “I’m particularly pleased that the New Jersey Housing and Mortgage Finance Agency has been able to identify and implement changes that will address the issue of chronic homelessness and provide incentives to build mixed income housing developments.”
The new rules proposed today by the HMFA would:
Provide more incentives to developers to include housing units for currently homeless households in their development projects, as well as provide social support programs to assist them while they are in transition;
Set a cap to ensure wider geographic distribution of housing available to low-income families throughout New Jersey;
Discourage a concentration of poverty in any one area or region of the state by limiting the number of low and moderate income units in communities where there are already a high number of affordable housing units;
Direct 40% of all awards to urban target areas to guarantee urban project development; and
Propose incentives to locate developments proximate to areas of high job growth and excellent schools.
Speaking in support of the proposed new regulations,
“The changes will create opportunities for children to flourish in high achieving schools while greatly expanding parents’ ability to find employment proximate to their residence” explained Acting DCA Commissioner Richard E. Constable, III, Chair of the HMFA Board and Co-chair of the Interagency Council on Homelessness.
The new rules were presented at a meeting in Trenton on May 7, 2012 and they would revise the way the HMFA administers the federal Low Income Housing Tax Credit (LIHTC) Program. The tax credits are a dollar-for-dollar reduction in federal tax liability and act as a catalyst to attract private investment into the affordable housing market. They are sold to an investor by the developer who, through equity from the sale, is able to take out a smaller mortgage to help build the project and that allows for more affordable rents. Through their annual allocation plans, high-cost states such as New Jersey can add additional incentives for projects located in high-cost areas or in areas that are difficult to develop.
New Jersey receives an annual allocation of approximately $18 million in tax credits and their sale produces over $162 million in project equity.
The proposed changes will be published in the July 2, 2012 issue of the New Jersey Register at which time the members of the public will have 60 days to comment on the rules.