What's Hot: The 4 Projects in the Works Near DC's Starburst Intersection | A 153-Room Aloft Hotel Pitched For Mt. Vernon Triangle
DC is Exploring Income Averaging
As the District's Department of Housing and Community Development (DHCD) drafts an update to its Qualified Allocation Plan (QAP) for low-income housing tax credits (LIHTC), a newly-available tool could be on the table.
Low-income housing tax credits are a tool used to incentivize private investment in affordable housing for households earning no more than 60 percent of area median income (AMI) by offering a tax credit in the full amount of that investment. Typically, LIHTC would be available in projects where at least 40 percent of the units are rent-restricted for households earning up to 60 percent AMI, or at least 20 percent of the units are rent-restricted for households earning up to 50 percent AMI. Among the many initiatives introduced as part of the federal tax reform bill that passed last year was the concept of income averaging, an additional means of distributing LIHTC funds.
story continues below
loading...story continues above
Income averaging would allow projects that receive LIHTC funding to accommodate households earning up to 80 percent AMI if at least 40 percent of the units are occupied by households earning an average of 60 percent AMI. In theory, income averaging would encourage more income diversity within a development, and would also increase the number of units that could be eligible for LIHTC equity. The tool could also be beneficial for multi-family rental properties undergoing the TOPA process where some households may be moderate-income, potentially making more TOPA buildings eligible for LIHTC funds.
DHCD held a public stakeholder meeting on the QAP last week and reportedly, many of those present responded positively to the idea of income averaging. However, implementation would undoubtedly complicate matters on both the qualifying and monitoring sides of the table, particularly because any project using LIHTC funds via this tool would have to maintain the required balance of income-qualified households through the duration of the affordability covenant.
Additionally, income averaging is similar to Opportunity Zones in the sense that the Internal Revenue Service has yet to release final guidance on how the tool should be governed.
DHCD plans to release a draft of the 2019 QAP by early May, at which point there will be a public hearing and a 30-day commenting period. The final QAP is anticipated to be in place in early June.
See other articles related to: affordable housing, affordable housing dc, dhcd, lihtc, low-income housing tax credit
This article originally published at https://dc.urbanturf.com/articles/blog/dc-is-exploring-this-new-lihtc-tool/15104.
Most Popular... This Week • Last 30 Days • Ever
Ebenezer Row is a collection of just eight duplex condominium residences and one town... read »
In this article, UrbanTurf looks at the estimated annual maintenance costs associated... read »
Another concept has been unveiled for one of DC's most contentious development sites,... read »
The residential development in the works along Florida Avenue NE is looking to increa... read »
Renter demand has continued to push Class A apartment rents in the DC region up this ... read »
- Sales Launch for One Townhome & Eight Duplex Condominiums in the Heart of Capitol Hill
- What Are the Annual Maintenance Costs When You Own a Home?
- A First Look At The New Plans For Adams Morgan's SunTrust Plaza
- 46 to 48: The Biggest Project In Trinidad Looks To Get Bigger
- How Much Did DC-Area Rents Rise At The Beginning of 2024?
DC Real Estate Guides
Short guides to navigating the DC-area real estate market
We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Start browsing below!
First-Timer Primers
Intro guides for first-time home buyers
Unique Spaces
Awesome and unusual real estate from across the DC Metro