Low-Income Housing Getting $14.5 Million Lift

SALT LAKE CITY, UT - The mortgage-loan bailout plan might be sputtering, but low-income renters and developers of low-income housing along the Wasatch Front are set to receive $14.5 million in state and federal tax credits as a result of the housing reform act approved this past summer. Under the ongoing program managed by the Utah Housing Corporation that is separate and pretty much unscathed by recent mortgage market turmoil, the money will underwrite most of the financing for 174 units in three projects along the Wasatch Front, the housing corporation announced Monday.

Program investors purchase the credits to offset their tax liability, and proceeds from the sale of housing credits are invested into the projects as equity to reduce the debt on the project and allow owners to charge lower-than-current rents when completed. Using tax credits to help reduce the continuing shortage of affordable housing across the state this year will bring the total units available to 853, a bottom line that the corporation president said would not have been achieved without them.

The "great strides" in providing 19,000 low-income units to date, pretty much all of the affordable housing in the state, wouldn't have occurred, and thousands of hard-working Utahns would have had a much more difficult time finding places to live without the credits plan, William Erickson said Monday.

This latest round of credits is in part a result of the Federal Housing Finance Regulatory Reform Act of 2008, the rescue plan of the housing government-sponsored enterprises Fannie Mae, Freddie Mac and the Federal Home Loans Banks approved by Congress in July. The act included $3.9 billion in grants for local governments to buy and rehab foreclosed properties, as a trade-off for propping up Freddie Mac and Fannie Mae.

Tax credits have proven to be the single most effective incentive for the development of affordable multifamily housing, Erickson said, noting that the Utah program established by the Legislature in 1991 supplements the federal incentive originally implemented by Congress in 1986 to encourage the creation and preservation of housing.

Along with the 19,000 rental units financed around the state recently, since 1975, about 80,000 Utahns have purchased their first home through Utah Housing. Dozens of local special-needs projects, such as women's shelters, are also financed through Utah Housing every year.