Assemblywoman Sharon Quirk-Silva (D – Fullerton) announced the signing of AB 346 by Governor Gavin Newsom, a law aimed at enhancing the production of affordable housing in California. The legislation facilitates the generation of more affordable housing units by introducing flexibility in the utilization of the state’s Low-Income Housing Tax Credit program. AB 346 allows the Tax Credit Allocation Committee (TCAC) to combine state tax credits with federal credits of either 4% or 9%, depending on the most suitable conditions, without introducing new taxes.
The Low-Income Housing Tax Credit program, primarily responsible for funding new affordable rental housing in California, offers 9% and 4% credits. The 9% credits are distributed by the TCAC, and developers qualify for the 4% credits if they cover at least half of their project costs with tax-exempt bonds. Initially, the 4% federal tax credits, coupled with tax-exempt bonds, aimed to tap into underused federal funds. However, the growing demand and subscription for these bonds and credits have led to funding shortfalls and uncertainties. By enabling the TCAC to allocate credits between the 9% and 4% programs based on availability and demand, AB 346 aims to alleviate these issues.
Matt Schwartz, President and CEO of the California Housing Partnership, highlighted the significance of AB 346 in bolstering the state’s affordable housing sector. He noted that the law would increase the value of state credits to investors, leading to an additional $42 million in private investment annually, which would support California’s affordable housing initiatives without extra state taxpayer expenses. This legislative change is seen as a significant advancement for low-income residents in California seeking affordable housing solutions.
Source link: https://fullertonobserver.com/2023/10/12/quirk-silvas-bill-boosting-affordable-housing-tax-credits-in-california-signed-by-governor-newsom/
Source Name: Fullerton Observer
