Tax credits entice builders
Special to The Union
There’s no real money in government-sponsored affordable housing for real estate developers — but there are tax credits.
While various government agencies and nonprofit organizations create affordable housing projects, they do not actually construct them. Private developers must finance and build the projects.
Almost all the projects mentioned in Thursday’s “A quest for housing” were funded through cobbled-together federal, state and regional housing program grants. That wasn’t nearly enough to pay the developers to build the rental apartments.
Lacking money to pay developers, the projects enticed developers to invest their own money by offering tax credits, according to county officials. The Regional Housing Authority dispenses a limited number of tax credits to proposed housing projects on a competitive basis.
For every dollar a developer spends on a housing project, the developer may deduct an equal amount off its tax bill on other income over a 10-year period.
Tax credits come from the Low-Income Housing Tax Credit program of the U.S. Department of Housing and Urban Development. The federal Tax Reform Act of 1986 created the tax credit program.
The program “finances the construction, rehabilitation, and preservation of housing affordable to lower-income households,” HUD documents stated.
Health and Human Services Agency Director Ryan Gruver was assiduous in crediting the Nevada County Board of Supervisors for prioritizing affordable housing. He said the county has gone above and beyond what it is funded and mandated to do by law. While conceding there isn’t enough affordable housing, he said without the supervisors’ backing, there would be even less low-income housing than there is.
Gruver also gave “a huge credit to (Housing Director) Mike Dent and his team (for bringing) projects like the Regional Housing Trust Fund together, and (facilitating) non-Regional Housing Authority projects like Empire Mine Courtyards.”
Some projects are slam dunks and some are NIMBY nightmares.
Brunswick Commons in Grass Valley not only had to overcome NIMBY opposition, it faced setbacks ranging from funding renegotiations to permitting and construction delays. Originally conceived in 2018, the hope is that it will finally open later this summer, Gruver said.
Cashin’s Field in Nevada City looks to open in less than half the time.
“When the city and county are working together with the Regional Housing Authority and an interested developer — they made magic happen in one to two years,” Dent said and grinned.
Tom Durkin is a freelance writer, editor and photographer in Nevada County. He may be contacted at firstname.lastname@example.org
Home sales have clearly slowed from the pandemic-fueled frenzy of 2020-2021, with July marking the fourth consecutive month the number of homes sold trailed 2021 sales figures.
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