County supervisors have voted to designate much of eastern Loudoun as a “revitalization area,” opening that area up to tax credits for investing in affordable housing.
The designation gives projects in that area a leg up when competing for federal Low Incoming Housing Tax Credits. That program gives tax incentives for property owners to maintain lower-than-market rents.
According to the U.S. Department of Housing and Urban Development, there have been more than 2 million LIHTC units built since 1995. In 2012, the New York Times reported the program is responsible for about 90 percent of all affordable housing built in the country.
The program was created through the Tax Reform Act of 1986, a bipartisan Reagan-era bill.
Loudoun County has placed its Suburban Policy Area in the revitalization area. The county’s resolution follows the language of the state law governing revitalization areas, stating that “the commercial, industrial or other economic development of the Revitalization Area will benefit Loudoun County but the Revitalization Area lacks the affordable housing needed.”
It also states “private enterprise and investment are not reasonably expected, without assistance, to produce the construction or rehabilitation of decent, safe and sanitary housing” for low- and moderate-income people and families.
The move comes as part of a sustained push to provide more affordable housing, including restructuring the county’s Affordable Dwelling Unit program to qualify for HUD and Virginia Housing Development Authority grants.
It is also developing a revolving loan program to help finance affordable housing projects.
The median income in the DC area for a household of four is $110,300. The U.S. Department of Housing and Urban Development considers area households making $88,240 or less to be low-income—and the county has found that in Loudoun, 48 percent of the workforce makes only half that. That amounts to almost 78,000 people with jobs in Loudoun making $44,120 or less.
Parts of the Low Income Housing Tax Credit are threatened by the Republican Tax Cuts and Jobs Act under consideration in Congress now.
According to analysis by accounting and consulting firm Novagradac & Company LLP, tax code changes in the House version of the bill could take away as much as two-thirds of production of affordable rental housing under the Low-Income Housing Tax Credit program. That would be in large party by eliminating private activity bonds, which account for more than half of all LIHTC-finance affordable homes.
The Senate version of the bill preserves private activity bonds, although other code changes are still expected to reduce the impact of the LIHTC.
The House of Representative and Senate have both passed version of the Tax Cuts and Jobs Act; Virginia Sens. Mark Warner (D) and Tim Kaine (D) opposed it; Rep. Barbara Comstock (R-VA-10) voted for it. The bill is now in conference committee; no Virginian representatives have been appointed to that committee.