POAH Chief of Staff, Andrew Spofford, talks to Building Green about funding affordable housing developments and the importance of the Low Income Housing Tax Credit (LIHTC).
By Nancy Eve Cohen, Building Green
...The value of the LIHTC is driven by the market. After President Trump was elected, just his promise to reduce corporate taxes from 35% to 15% meant “the bottom fell out of the tax credit market,” according to Sunshine Mathon, CEO of Piedmont Housing Alliance in Charlottesville, Virginia. That’s because if investors think they may not have as big a tax liability, “their appetite for buying Low Income Housing Tax Credits is also going to fall,” says Mathon.
“Based on people’s anticipation that a tax reduction might happen, there was a reduction in tax credit equity pricing of something like 10% to 15% in the market, compared to the period immediately before the election,” says Andrew Spofford, chief of staff for Preservation of Affordable Housing (POAH). “This would reduce the amount of dollars flowing into projects from the tax credit,” says Spofford. “This is all happening on top of an existing affordable housing crisis that is pretty severe,” Spofford added.
The price drop came after near historic highs for the program.
Spofford says investors walked away from two projects at POAH, causing delays while the nonprofit found other investors. And the price the investors paid for each tax credit was reduced. “It meant reducing the scope of renovations that we can afford to do on the buildings,” says Spofford...
Read the full article on BuildingGreen.com