A state set aside may help low-income housing developers lure investors.
New rules are creating greater opportunities for Pennsylvania developers willing to build affordable housing for people with special needs.
Every year, there’s fierce competition for a share of Pennsylvania’s $25 million in low-income housing tax credits. Tax credits are like currency, according to Ben Laudermilch of the Housing Authority of Cumberland County. It’s a non-profit company, which is smaller than many of the affordable housing developers vying for Pennsylvania’s tax credits.
Laudermilch: The Pennsylvania Housing Finance Agency really controls the purse strings on those, and it really favored larger developers.
The Housing Authority applied for a tax break for its Enola Chapel project, and was turned down twice. Then earlier this year, the Pennsylvania Housing Finance Agency changed its rules, and created a pool of funds for developers like Laudermilch. On its third try, the housing authority won a tax-credit award.
Laudermilch: Fortunately for us the smaller guys or the guys who are willing to put a small portion of their housing identified as special needs, there’s a little bit more leeway, there’s some funding available for us as well.
Laudermilch’s group wants to convert an abandoned church in East Pennsboro Township into apartments for homeless people with developmental or mental health disabilities.
The investor gets a dollar’s worth of tax incentive, then returns a portion of that to the builder, perhaps 74 cents on the dollar, to help finance the low-income housing project.
The Enola Chapel renovation will cost $1.2 million. Laudermilch says the turn-around grant from the investor is more than $600,000.