Leech Tishman

Congress to Extend Tax Credits for Economic Development, Housing

By: Kenneth C. Foltz, Sr., Esq.

WASHINGTON, D.C.–  The path to reaching a compromise to break the stalemate on the Federal budget is being paved by extending current tax credits and lifting the ban on crude oil exports. The House of Representatives is on the verge of passing two bills, the omnibus spending bill and the tax credit extenders bill. Their bipartisan compromise avoids a government shutdown and gives new life to two significant tax credit programs used as a catalyst for real estate development projects.

If the bills are passed as proposed, the New Market Tax Credit (NMTC) and Low Income Housing Tax Credits (LIHTC) will be extended and funded in accordance with these general terms:

New Market Tax Credits

The NMTC program would be authorized for 2015 through 2019 at $3.5B of funding annually. This extension and funding commitment would provide stability for the Community Development Entities (CDEs) that obtain the NMTC allocations, and are ultimately used by developers to start new projects in the CDE’s designated communities.

Low-Income Housing Tax Credits

The LIHTC program, which has generated housing projects in underserved areas, would be permanently extended at the 9% credit level under the current proposal. Solidifying this program at this level would enable developers to plan larger projects and phased projects without fear of the program being eliminated or delayed.

The extension and funding for the NMTC and LIHTC will provide significant development opportunities across the United States. A good example of a community that has utilized both programs to spur development and community revitalization is the City of Pittsburgh.

Kevin Acklin serves as Pittsburgh Mayor Bill Peduto’s Chief of Staff and also Chair of the Urban Redevelopment Authority (URA). Kevin shared his thoughts on the news of the potential extensions and funding commitments with Leech Tishman, noting that the NMTC and LIHTC programs have been critical tools for the City and URA to bring developments and vitality to underserved communities. He said Pittsburgh Urban Initiatives was the only local CDE to receive an NMTC allocation in the last round of funding. “The City needs a balance of low-, middle-, and high-income residents to thrive economically, and the LIHTC program is critical to helping Pittsburgh achieve this balance.”

Lawyers at Leech Tishman have the expertise, knowledge and relationships to assist businesses and real estate developers via practices that span Real Estate, Construction Law, Taxation, Corporate Law and Government Relations. This year the “Consolidated Appropriations Act” is 2009 pages, and the tax extender bill is nearly 300 pages. For more information on the above tax-credit programs or other tax provisions of new legislation, or how Leech Tishman can help your company with a large or small development project, please contact Kenneth C. Foltz, Partner, Leech Tishman: kfoltz@leechtishman.com or 412-261-1600.

Leech Tishman is a firm dedicated to providing full-service commercial legal services to individuals, businesses, and institutions. We combine a deep understanding of our clients and their businesses with skilled legal counsel to find solutions. Leech Tishman offers legal services in alternative dispute resolution, bankruptcy & creditors’ rights, construction, corporate, employee benefits, employment, energy, environmental, safety & toxic torts, estates & trusts, government relations, immigration, insurance coverage & corporate risk mitigation, intellectual property, internal investigations, international legal matters, litigation, real estate, and taxation. Headquartered in Pittsburgh, PA, Leech Tishman also has offices in Chicago, Los Angeles, New York and Wilmington, DE. For more information call 412.261.1600 or visit us at www.leechtishman.com.

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