The organization that represents the state’s affordable-housing industry, the New York State Association for Affordable Housing, is displeased with a provision in the revenue bill under consideration in Albany, as are advocates of historic preservation such as the New York Landmarks Conservancy.
The revenue bill offers one of the more blatant forms of what is, by most any definition, borrowing. (Remember: Many in Albany, particularly in the Senate, refused the Ravitch plan because it contained borrowing.)
The bill would defer the payment of tax credits to private firms for things like construction on polluted sites, creation of affordable housing, and historic preservation until 2013—delaying a bill now while adding to the long-term bill later on. This doesn’t actually save much money—it just means that the state pushes its bills three years down the line.
With that said, the deferment would likely discourage some investment in the short term, which is the complaint of the preservationists and the affordable-housing developers. The bill restricts payment to $2 million in credits per taxpayer right now, which means any one developer would be restricted to that $2 million regardless of how many properties he or she is working on.
Here’s the email from NYSAFAH to members, which warns that it will serve as a deterrent to anyone looking to build:
Urgent: Your action is needed now! The Senate and Assembly are continuing negotiations of the revenue budget bill today, which includes a provision to defer for 3 years 31 state tax credits, including the Low Income Housing Credit, Brownfields Tax Credit and Historic Rehabilitation Tax Credit for taxpayers with more than $2 million in aggregated business tax credits. This would severely limit the use of state tax credits, and harm existing affordable housing projects for several reasons:
1) Large national investors seeking to provide equity for NYS projects of any type will be limited to $2 million in total NYS credits in any one year – and will therefore shift investment to projects in other states.
2) Affordable housing projects relying on or underwritten with state tax credits to be placed in service in 2010, 2011 or 2012 are put in jeopardy.
3) In-state developers will be unable to raise SLIHC equity for multiple projects in any given year.
4) The synergies between credit programs will be completely wiped out – there will be no value to combining credits (green building and low-income housing; rehabilitation credit and brownfields programs), and thus far fewer project starts.
Please call the Governor and legislative leadership TODAY to oppose the deferral for the SLIHC, BTC and HRTC. If you have an affordable housing project that will be affected, please call legislators in the project’s district, asking them to advocate for an amendment.