$20.6 Million in Low Income Housing Tax Credits Will Create Jobs, Help Michigan Residents Find Affordable Housing
Michigan Governor Jennifer M. Granholm has announced that over 2,100 units of affordable rental housing will be built or renovated for low to moderate-income Michigan families, the elderly, people with disabilities and those at risk of homelessness as a result of $20.6 million in federal Low Income Housing Tax Credits (LIHTC) approved by the Michigan State Housing Development Authority (MSHDA). The tax credits will also help bolster the state’s economy by creating approximately 3,200 jobs in construction and related trades.
“These tax credits will leverage $200 million in investment necessary to develop thriving and vibrant communities around the state, creating jobs and providing affordable housing,” said Granholm. “In this time of economic challenge, we must do all that we can to stimulate the economy and help citizens who are struggling.”
MSHDA Executive Director Keith Molin said a portion of the total award would provide units of rental housing for disabled Michigan residents as well as those individuals and families at risk of homelessness.
“About 45 percent of the units created through this allocation are going to be in distressed areas,” Molin said. “This accounts for over $9.5 million going into areas that are already suffering from severe economic strain and high poverty levels.”
Owners and investors in low-income housing may apply to receive a tax credit against their federal tax liability if the rental housing has at least 20 percent of its units for households with incomes at or below 50 percent of the area median, or 40 percent of its units reserved for households with incomes at or below 60 percent of the area median.
The amount of the credit is based on the percentage of certain costs to renovate or develop housing that will be income-and rent-restricted for a minimum of 30 years. Developers can sell the credit to raise equity for their projects, reducing the necessary mortgage financing for the developer and making rents lower for tenants.
February 21st, 2009 at 4:42 am
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