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10C — June 23 - July 13, 2017 — Mid-Year Review — M id A tlantic
Real Estate Journal
M ixed U se /M ixed -I ncome
Despite looming tax reform, pricing has stabilized and investors are active View from the top: Investor demand for LIHTC remains high for balance of 2017
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and rehabilitation of rental housing affordable to indi- viduals and families earning less than 60 percent of area median income, LIHTCs are exclusively awarded by state housing agencies to devel- opers who, in turn, sell the credits to private investors in exchange for funding the con- struction and rehabilitation of affordable housing. The equity provided by LIHTCs allows developers to borrow less money to finance their project and pass the savings on in the form of lower rents
for low-income tenants. No one is in a better posi- tion to attest to the highly ef- fective, far-reaching benefits of the LIHTC program than New Jersey Housing and Mortgage Finance Agency (NJHMFA) Executive Direc- tor Anthony L. Marchetta, who has overseen affordable housing creation and the state’s LIHTC awards over the past eight years under the Christie Administration. In fact, many NJHMFA- financed LIHTC projects have been award-winning and dis-
tinctly reflect a sea change in the industry. “Affordable housing today is a complete revision of the old, failed prospect that was public housing back in the 1950s. Today’s affordable product shatters the outdated high-rise stereotype with lower density footprints, bet- ter quality building and unit designs and a range of ame- nities and support services,” Marchetta points out. “Many of our LIHTC proj- ects have garnered top awards for rehabilitation, adaptive
re-use of older structures and for new construction that has transformed formerly blighted, underutilized areas into vibrant, tax revenue- generating communities. We are especially proud of the Agency’s lead role in public- private partnerships that create mixed-income, mixed- use projects that are designed to improve and enhance the lives of tenants as well as residents of surrounding com- munities. Transit villages – projects built around or close to rail service and regional bus lines that feed into larger metro hubs such as New York City and Philadelphia – are highly attractive to commut- ers and others drawn to a major city’s arts, culture and dining destinations. ” The high demand for LI- HTCs as a critical source of subsidy for the develop- ment of affordable housing in New Jersey is evidenced by a record number of ap- plications received by the Agency for the competitive application rounds in May of this year. At the end of July, 9% awards will be allocated totaling $28M projected to finance approximately 1,250 units over 15 projects. Addi- tionally, non-competitive 4% credits were issued in 2017 to create 935 units. “There is still uncertainty in the tax credit equity market due to the possibility of tax reform,” Marchetta reports, “but pric- ing has seemed to stabilize and investors are active.” Examples of highly suc- cessful, award-winning LI- HTC 4% and 9% NJHMFA- financed projects include: Hahne & Co.: P3 Rehab/ Adaptive Reuse into Mixed Use/Mixed-Income in Newark (4%); Linc at Orange Station, Transit Oriented Develop- ment in City of Orange (9%); G.G. Green Senior Residenc- es, Rehab/Adaptive Reuse into Mixed Use in Woodbury; Woodrow Wilson Commons I and II: new construction of three phases replacing 136 public housing units (9%), among others. For information about NJHMFA-financed projects, please visit www.njhmfa.gov Anthony L. Marchetta is the Executive Director of The New Jersey Housing and Mortgage Finance Agency. n
ince its creation as part of the Tax Reform Act of 1986, the federal
Low Income Housing Tax Credit (LI- HTC ) h a s become the mo s t s u c - cessful tool for building and preserv- ing afford-
AnthonyMarchetta
able rental housing across the United States. An incentive to encourage private sector investment in the creation
Linc32 at Orange Station Essex County RPM Development Group
Public-Private Partnerships Revitalize Urban Centers and Downtowns Discover the Difference NJHMFA’s Innovative Financing Makes in Your Next Mixed-Income and Mixed-Use Development
www.njhousing.gov • 609-278-7518
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