The 2018 New York State budget adopted on Saturday, March 31st included several measures which will aid in the further development of affordable housing. The Executive budget included a proposal that would have deferred the use of certain tax credits, beginning on or before January 1, 2018 until December 31, 2020, if such credits exceed an aggregated amount of $2 million. The tax credits impacted included the state low income housing credit, the green building credit, the brownfield redevelopment tax credit, the credit for rehabilitation of historic properties and various other credits. The adopted budget passed by the Legislature rejected this change.
The Legislature also approved the bifurcation of the State Low Income Housing Tax Credit (“SLIHC”) from the Federal Low Income Housing Tax Credit (“Federal Housing Tax Credit”), allowing there to be separate investors in the Federal & State tax credits on the same transaction; and the certification of the SLIHC allowing for the transfer of a portion or all of the SLIHC to another taxpayer (although it is limited to first level of investor who is not an owner).
These two changes should increase the SLIHC value, and the resulting equity, coming to transactions which receive an allocation of SLIHC. The budget also continued the State’s commitment to the five year/$2.5 billion affordable housing plan enacted last year.