NJHMFA Awards $28M In Federal Tax Credits for Affordable Housing

TRENTON, NJ—A mixed-income development in Jersey City, affordable apartments for families in Trenton, a senior community in Wall and supportive housing in Glassboro were among the 22 developments awarded more than $28 million in the highly competitive federal nine-percent Low-Income Housing Tax Credit program by the New Jersey Housing and Mortgage Finance Agency to expand affordable housing statewide.

The tax credits will support the creation of more than 1,400 affordable apartments for families, seniors and special needs residents in 12 counties. The projects total nearly $479 million in development investment and will create thousands of construction-related jobs, generate additional tax revenues and boost local economic activity.

“Investing in housing that is affordable in New Jersey is the most important thing we can do to help individuals, families and seniors of mixed income levels be able to afford to live in this state,” says Lieutenant Governor Sheila Y. Oliver, who also serves as commissioner of the Department of Community Affairs and chairs the NJHMFA board. “These vital tax credits help keep our commitment to the goal of producing housing that meets the diverse needs of our communities with the added benefit of producing thousands of jobs across the state.”

Federal LIHTCs are awarded to developers to build new rental apartments or rehabilitate existing rental units for low-income households. Typically, the tax credits are sold to investors, who then provide private equity to fund construction. In return, the investors receive a dollar for dollar reduction on their federal tax returns for a period of 10 years.

The Low-Income Housing Tax Credit is the most prolific source of funding for new affordable rental units, and since its creation in 1986, the program has created an estimated 3 million units. NJHMFA is the state’s sole administrator of the program and currently monitors nearly 600 tax credit developments of more than 50,000 housing units statewide.

“Through this award of tax credits, developers can leverage $270 million in private equity to help finance the development of affordable housing and improve the lives of thousands of residents,” says NJHMFA executive director Charles A. Richman. “This program has been key to our efforts to expand affordable housing and invest in communities across the state.”

NJHMFA estimates that the 2018 round of tax credit awards will result in more than $759 million in one-time economic output, defined as the total value of industry production, such as sales and business revenues. During construction, the projects will produce more than 4,500 full-time jobs and approximately $27.8 million in state and local taxes. Once completed, the projects will support nearly $85 million in economic output, 479 full-time jobs, and approximately $4.8 million in state and local taxes annually.