|e-News, Aug. 2011|
This October marks the 25th anniversary of a federal housing program that charted a new path for affordable housing development.
The 1986 Tax Reform Act created the Low Income Housing Tax Credit (LIHTC), which forges a unique public-private partnership enticing investment into the construction and rehabilitation of affordable rental housing for lower-income households. With more than 2.4 million units across the United States created, it is considered one of the country’s greatest public policy success stories.
“Since North Dakota Housing began administering the program, $31 million in tax credits have been allocated for the production or rehabilitation of 189 projects in 43 communities statewide. The $362 million private capital investment has produced more than 5,000 units,” said Mike Anderson, North Dakota Housing Finance Agency (NDHFA) executive director.
A combination of government oversight, private sector investment and public input has resulted in a highly efficient and effective program.
“The program brings private capital to affordable housing development by offering investors credit against their federal income tax liability,” said Jolene Kline, NDHFA director of planning and housing development. “The public-private collaboration created by the program has been vital to its success.”
Hallmarks of the program include:
“North Dakota Housing allocates credits according to our qualified allocation plan and scoring system – both are subject to annual public scrutiny,” said Kline.
NDHFA staff regularly reviews the state priorities for the program to ensure that it fits the ever-changing housing landscape. The Agency currently encourages development by non-profit organizations and on tribal land through special set-asides.
The state’s newest focus is a special targeting of 50 percent of its’ annual credit authority for communities experiencing a housing shortage due to economic growth from oil and gas activity. The program has proven to be a good development tool for the areas of the state struggling to meet housing needs.
“Rapid economic growth has significantly increased the demand for housing in our community,” said Williston Mayor Ward Koeser. “Tax credit units have helped us address the need for affordable housing for individuals and families working in lower paying service industry jobs and on fixed incomes.”
In Williston, the recently completed Waters Edge and Williston Senior Apartments, and the soon to be developed Nokota Ridge project were all supported by the LIHTC program.
“The development made possible by LIHTC is so important because there are few other programs that provide this much-needed housing,” said Anderson. “As market conditions change and Section 8 housing ages, we are seeing properties dropping out of the affordable housing ranks. But thanks to LIHTC, we are able to replace some of those units.”
The tax credit program’s long history and proven track record of stimulating investment in affordable housing has been a huge win-win situation for investors, developers, community leaders and partners.
“Without tax credits, many communities would not be able to provide housing for lower-wage earners. And, seniors and disabled households would be forced to move to larger communities to find suitable homes,” said Kline.
The LIHTC program has played a significant role in the creation and preservation of affordable rental housing for households of modest means in North Dakota and across the United States.
“The LIHTC program has been incredibly important in providing safe, decent and affordable housing choices for every North Dakotan,” said Anderson. “North Dakota Housing is proud of the accomplishments of the program over the past 25 years and looks forward to even greater success in the future.”
North Dakota Housing Finance Agency
2624 Vermont Avenue, PO Box 1535, Bismarck, ND 58502-1535
Bismarck Main Office -- (701) 328-8080 | Nation Wide Toll Free (800) 292-8621 | Fax (701) 328-8090 | TTY (800) 366-6888
Fargo Field Office -- (701) 239-7255 | ND Toll Free (877) 239-3200 | Fax (701) 239-7257 | TTY(800) 366-6888
Equal Housing Opportunity