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Affordable Housing and Economic Development Notes

February 2009
People: David Abromowitz, Max Friedman
PDF

Just four weeks into his administration, President Obama signed into law the largest federal funding package in decades. After intense negotiations between the House and the Senate, a conference committee reached a final decision that blended both the House and Senate stimulus packages. The American Recovery and Reinvestment Act of 2009 (ARRA) is a combination of grant programs, loans, and tax credits that is intended to create and save jobs, assist state and local governments with budget deficits, and provide tax cuts and incentives to revitalize the economy. Below is a brief overview of the provisions which may assist many of your developments, including affordable housing and economic development projects.

Of the $787 billion stimulus package, over $13 billion was included in appropriations for HUD. Your projects may benefit from the following funding sources.

  • $1 billion for Community Development Block Grant
  • $2 billion for the Neighborhood Stabilization
    Program (NSP)
  • $250 million for green affordable housing
  • $2 billion for Project Based Rental Assistance
  • $2.25 billion in HOME funding with $2.25 billion set
    aside for low income housing tax credit gap financing
  • $4 billion for the Public Housing Capital Fund

Other sections of interest are included below.

  • Transportation: Approximately $48 billion is included for transportation/infrastructure funding.
  • Military Housing: The stimulus package includes $114.607 million to Department of Defense for construction of military housing.
  • Low Income Housing Tax Credit (LIHTC): The $2.25 billion in HOME funds have been appropriated to provide competitive grants in order to fill financing gaps for LIHTC projects. In addition, the legislation includes a program to exchange LIHTC allocations for direct government grants.
  • Energy: The legislation appropriates approximately $38 billion in energy efficiency spending, including $3.2 billion for Energy Efficiency and Conservation Block Grants which can be used for a variety of activities including conducting residential and commercial building energy audits; developing and implementing building codes and
    inspection services to promote building energy efficiency; and developing, implementing, and installing on or in any government building onsite renewable resources (solar and wind energy, fuel cells and biomass).

For questions regarding the information contained in this client alert, please contact your customary Goulston & Storrs attorney or:

David M. Abromowitz
617.574.4106
dabromowitz@goulstonstorrs.com


Max Friedman
212.878.5124
mfriedman@goulstonstorrs.com

Pursuant to IRS Circular 230, please be advised that, this communication is not intended to be, was not written to be and cannot be used by any taxpayer for the purpose of (i) avoiding penalties under U.S. federal tax law or (ii) promoting, marketing or recommending to another taxpayer any transaction or matter addressed herein.

This client advisory should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer concerning your situation and any specific legal questions you may have.

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