Blueprint for November
The “Tax Credit Club”
By Jessica Hoefer
3 min read
As a tween, I enjoyed reading Nancy Drew mysteries – the female counterpart to The Hardy Boys. I, like many readers, felt as if I was solving each case alongside the heroine. But Nancy didn’t always work solo. She often had help from what has been coined in its newest iterations as the Drew Crew. A team of trusted confidants that the sleuth could always rely on to join forces and fill in the gaps.
It may seem a strange metaphor to use, but this is how I envision the different federal and state tax credits working together or independently.
Many types of tax credits exist, but there are a few that stand out. As a job creator and generator of economic income, the Low Income Housing Tax Credit has become the most important resource for creating affordable housing in the U.S. today. The Federal Historic Tax Credit also creates jobs and is one of the nation’s most successful and cost-effective community revitalization programs. Though set to expire in 2025, the New Markets Tax Credit has earned its place thanks to a 20-year record of stimulating high-impact investments in low-income communities. And the newest, Solar Investment Tax Credit, has facilitated the expansion of solar installations with an annual growth rate of 48 percent since its implementation.
This packed issue of Tax Credit Advisor explores how these and other credits influence and support the affordable housing industry today.
Articles addressing Solar Tax Credits include Legally Speaking (p. 8), which explains solar strategy, monetization, financial benefits and even some of the risks associated with installing solar energy equipment into a project. In Tying it All Together, Ravi Malhotra shares recent agency updates relevant to the industry and some suggestions for how to guide federal funds toward housing.
The New Markets Tax Credit Progress Report 2023 shares key findings from the New Markets Tax Credit Coalition’s annual report on the credit, outlines trends seen by those receiving the credit and highlights stand-out projects that were beneficiaries of the credit in 2022. And Breaking Ground spotlights how Greenline Ventures deploys flexible and diverse New Markets Tax Credits to small businesses in underserved communities throughout the country.
In Legislative Update, we learn more about how Historic Tax Credit advocates are supporting the Historic Tax Credit Growth and Opportunity Act by requesting co-sponsorship and inclusion of some temporary and permanent provisions in a potential year-end tax bill.
Three Decades of Qualified Contracts explains how owners of a Low Income Housing Tax Credit-funded development can opt out of the LIHTC program after Year 15 by filing a notice with their state Housing Finance Agency and placing the property on the market.
In Case Study: IRA, BIL Bringing Big Pots of Money to Green Affordable Housing and Case Study: Landmark Place in Kingston, NY, we see how the combining of different tax credits benefits projects.
We aren’t solving mysteries. But each credit is its own solution to the affordable housing crisis. And whether you’re using one or braiding several together, they form a sort of “tax credit club.” If one isn’t enough or not applicable, there’s another ready to jump in and save the day.
Regards,
Jessica Hoefer
Editor-in-Chief
