Housing study lists benefits of tax credit program to N.H.
When 149 units of affordable family housing are built in New Hampshire through the Low Income Housing Tax Credit Program, residents in the state reap more than $22 million a year and local and state governments get nearly $3 million.That’s according to the New Hampshire Housing Finance Authority, which commissioned the National Association of Homebuilders to prepare a report on the impact in New Hampshire of LIHTC, a federal tax credit program that funds affordable, multi-unit housing.In the past three years, on average, LIHTC funds have funded the building of 149 family units and 53 elderly units of affordable housing each year in New Hampshire.According to the report, when 149 units of multi-family housing are built in the Granite State with LIHTC funds, 328 full-time equivalent jobs are created in the state for the year, on top of the aforementioned economic benefits.And when 53 units of elderly housing are built through LIHTC, that results in another $7.1 million for New Hampshire residents, $927,000 for state and local governments, and 105 full-time equivalent jobs created, it found.The report calculated the amount that goes to state and local governments through tax revenue from sources like permit and impact fees, while the amount that goes to residents considers how much is spent directly on construction and indirectly by residents who are paid through construction and spend it in the state.In each subsequent year after they are built, the projects funded through LIHTC continue to support 110 jobs and generate an additional $8 million, the report said. That figure considers the economic benefits of the buildings’ residents using local services, shopping locally and paying taxes. LIHTC is a dollar-for-dollar tax credit, created in 1986, that encourages private equity investments in the development of affordable rental housing for low-income Americans.Through the program, developers of qualified projects are awarded federal housing tax credits, which they can then sell to investors to raise capital for their projects. That reduces the debt they would otherwise have to borrow, meaning they can offer low, more affordable rents.Then, so long as the property stays in compliance with program requirements, the private market investors receive a dollar-for-dollar credit against their federal tax liability for 10 years.It is estimated that New Hampshire will receive $2.9 million in LIHTC credits in 2012.”Although we believe the NAHB report’s estimated impact is conservative, it still shows the significant benefit that housing tax credits bring to New Hampshire,” said Dean Christon, the authority’s executive director. — KATHLEEN CALLAHAN/NEW HAMPSHIRE BUSINESS REVIEW