Boustany, Richmond Fight To Restore Storm Damaged Homes
WASHINGTON, DC—Congressman Charles W. Boustany (LA-Southwest Louisiana) and Congressman Cedric L. Richmond (LA-2) todayintroduced a measure to extend the Gulf Opportunity Zone(GO Zone) Low I
ncome Housing Tax Credit (LIHTC) through 2012. The GO Zone LIHTC, established in 2005, encourages developers and investors to rebuild the Gulf’s housing infrastructure in the wake of Hurricanes Katrina and Rita. The economic downturn slowed much of the progress on many critical projects, and a further extension of the credit is needed to fully utilize the program.
Hurricanes Katrina and Rita destroyed or heavily damaged over 100,000 rental homes in Louisiana and Mississippi alone, according to the Federal Emergency Management Agency. Currently, 77 housing restoration projects, including 6,200 affordable apartments along the Gulf Coast, may be unable to secure financing.
“As our state continues down the long road to recovery, we need to ensure that every opportunity is given to those trying to rebuild,” CongressmanBoustany said. “These tax credits have been extremely beneficial to the coast after the devastation of Hurricanes Rita and Katrina. By extending them, we are providing time for developers to begin and complete the unfinished work of the reconstruction and recovery of Louisiana.”
“Extending the GO Zone Tax Credit is not about just rebuilding houses. It’s about rebuilding communities. It is about bringing back the big four housing developments better and safer,” said Congressman Richmond. “I recently joined HUD Secretary Shaun Donovan at the grand reopening of Lafitte, which partially relied on the tax credit. Instead of rows of buildings, it’s now a neighborhood. It has greenways for family recreation, head start facilities for kids, and a new community health clinic two blocks away. Extending the GO Zone Tax Credit gives developers the “Go” sign to rejuvenate other neighborhoods.”
The GO Zone LIHTC was recently extended from December 31, 2010 to December 31, 2011. However, the extension does not allow developers adequate time to have apartments and townhouses “key ready” by the tax credit’s expiration date. Most Gulf Coast projects require at least 18 to 24 months to become “key ready” and, as a result, investors are unlikely provide capital with a limited one-year timeframe.
A full two-year extension allows developers to attract investors to their developments, have adequate time to overcome development challenges, and create more opportunities for displaced residents to return.
The Senate companion to this bill was introduced by Louisiana Senators Mary Landrieu and David Vitter, and Mississippi Senators Thad Cochran and Roger Wicker.
BACKGROUND:
What is the impact of the GO Zone Low Income Housing Tax Credit (LIHTC) Extension on Gulf States?
State | Projects | Units | Development Costs | Construction Jobs | Unused Credits |
Louisiana | 38 | 3,400 | $650 million | 8,000 | $47.9 million |
Alabama | 17 | 1,075 | $120 million | 2,020 | $10.9 million |
Mississippi | 22 | 1,695 | $250 million | 3,780 | $21.4 million |
TOTAL | 77 | 6,170 | $ 1 billion+ | 13,800 | $80.2 million |
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