The fourth and fi nal phase of Gloria Robinson Court Homes in Jersey City, developed by Pennrose, is a 70-unit mixed-income townhome complex that includes affordable homes and an early childhood education center. — Courtesy: Pennrose
By Joshua Burd
A state agency is set to fund the construction of some 1,400 low- and moderate-income apartments in the state, thanks to a new allocation of a popular federal subsidy program.
In an announcement Tuesday, the New Jersey Housing and Mortgage Finance Agency said it has received roughly $28 million in 9 percent Low Income Housing Tax Credits. The HMFA is now accepting applications through late July from affordable housing developers seeking to leverage the federal program, also known as LIHTC, to raise equity for new projects.
The agency, which is the state’s administrator of the program, expects this year’s round of tax credits to generate around $250 million in equity for new affordable housing construction.
“These tax credits have been instrumental in creating homes for families seeking affordable places to live, in developing independent living opportunities for persons with special needs, and in providing stable residences for seniors on fixed incomes,” said Lt. Governor Sheila Y. Oliver, commissioner of the New Jersey Department of Community Affairs and chairwoman of the HMFA board. “We look forward to continuing our partnership with the federal government on this beneficial program, which has done so much to spur the development of low- to moderate-income housing in New Jersey.”
The LIHTC program has helped finance some 55,000 housing units in New Jersey to date since it was established by the Tax Reform Act of 1986. The 9 percent tax credits, which are a dollar-for-dollar reduction in federal tax liability, help attract private investment by allowing affordable housing developers to receive the subsidy and then sell the credits to investors.
The equity generated from the sale can fund about 70 percent of a project, the HMFA said. The additional capital lessens a developer’s debt burden and allows the project to carry a smaller mortgage, resulting in more affordable rents.
Advocates for low- and moderate-income residents have raised concerns that the recent corporate tax cut would weaken the investor market for Low-Income Housing Tax Credits. But developers in New Jersey will welcome any additional subsidy, as court-ordered settlements force towns to ramp up affordable housing construction across the state.
The application deadline for family, senior and supportive housing projects is 12 p.m. on July 24, the HMFA said. Applications for mixed-income projects will be accepted on a rolling basis starting July 24 through 12 p.m. on Aug. 31.
The 9 percent tax credit awards will be announced in early November, HMFA said. No direct funding comes from the New Jersey treasury for the LIHTC program.
“Tax credits are a critical tool in enabling the development of thousands of affordable housing units across the state,” HMFA Executive Director Charles A. Richman said. “In addition to family, senior and supportive housing, the mixed-income program specifically targets the need for projects combining both market rate and affordable housing for low- to moderate-income residents.”
