Under current IRS rules tax credit rents there is a utilityallowance for resident-paid utilities. According to the propertyowners' lobbying efforts, the current methods used to calculate theresident's utility cost tend to overestimate these costs.
The result, supporters of the new regs say, is reduced grossrents for the owner and, potentially, a LIHTC project that is nolonger financially feasible.
"The current methodology is not based on data that is comparableto the properties in which the tenants live," David Cardwell, vicepresident of capital markets and technology for the National MultiHousing Council, tells GlobeSt.com. The NMHC and the NationalApartment Association have been lobbying the IRS to change theregulations since 2004.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
