Funding will stimulate the production of 65 affordable housing units stalled by recession and create quality jobs
WASHINGTON – U.S. Housing and Urban Development Deputy Secretary Ron Sims today visited Cedar Gateway Developments in San Diego, CA, an affordable housing development that was under construction but came to a halt last March due to the loss of tax credit funding. HUD Tax Credit Assistance Program (TCAP) funding, provided through American Recovery and Reinvestment Act of 2009 (Recovery Act), will now allow the project’s construction to restart in November, along with thousands of others throughout the country, creating quality jobs in the hard-hit construction industry.
“Today’s announcement demonstrates that the Recovery Act is working now to jumpstart the nation’s ailing economy,” said Deputy Secretary Sims. “The TCAP program is significantly boosting our efforts to put the American people back to work, right here in San Diego, while at the same time providing quality, affordable housing options for low-income California families at a time when those options are critical.”
In February, only eight days after the Recovery Act was signed, HUD announced that the State of California was allocated $326 million in TCAP funding. Last week, HUD announced that California’s plan for spending those funds was approved and available to the state for spending. $14 million of California’s total $326 million is being used to restart construction on Cedar Gateway. The Recovery TCAP funds will provide 65 affordable housing units for low income families at Cedar Gateway.
The current economic and financial crises present significant challenges for the construction industry, particularly residential construction. One of the by-products of this crisis has been the freezing of investments in the low income housing tax credit (LIHTC) market. The tax credits create an incentive for investors to provide capital to developers to build multi-family rental housing for moderate- and low-income families across the nation. Since the contraction of the credit market, and as traditional investors remain on the sidelines, the value of tax credits has plummeted. Consequently, as many as 1,000 projects (containing nearly 150,000 units of housing) are stalled across the country.
In response, the Recovery Act provides $2.25 billion for TCAP, a grant program to provide capital investments in these stalled LIHTC developments. HUD is awarding TCAP grants by formula to state housing credit agencies (all 50 states plus the District of Columbia and the Commonwealth of Puerto Rico) to complete construction of qualified housing projects that will ultimately provide affordable housing to an estimated 35,000 households nationwide. Since a major purpose of this program is job creation, the Recovery Act establishes ambitious deadlines to spend the grant funds and requires state housing credit agencies to give priority to projects that can begin immediately and be completed by February 16, 2012.
HUD is committed to implementing Recovery Act investments swiftly and effectively as they generate tens of thousands of jobs, modernize homes to make them energy efficient, and help the families and communities hardest hit by the economic crisis. The Recovery Act includes $13.61 billion for projects and programs administered by HUD, nearly 75 percent of which was allocated to state and local recipients immediately after President Obama signed the Act into law. The remaining 25 percent of HUD Recovery Act funds is being awarded through a competitive process.
In addition, Secretary Donovan and the Department are committed to providing the highest level of transparency possible as Recovery Act funds are administered. It is vitally important that the American people are fully aware of how their tax dollars are being spent and can hold their federal leaders accountable. Every dollar of Recovery Act funds HUD spends can be reviewed and tracked at HUD’s Recovery Act website. The full text of HUD’s funding notices and tracking of future performance of these grants is also available at HUD’s Recovery Act website.
HUD is the nation’s housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation’s fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.