Friday, March 4, 2011

Big LIHTC day: IRS population data are out.

So it's the big once-a-year day when the IRS posts its state-by-state population estimates. These are multiplied by the figures in another once-a-year announcement, currently last October's Revenue Procedure 2010-40, to arrive at the size of the pie to distribute among for-profit players in the subsidized housing business.

Not perhaps exciting news for most people, but this means big money to a relatively small, important group of developers and investors.

As usual, the Novogradac CPA firm caught the item first. The population list is on their site at present. When the IRS gets around to posting it publicly, this should be the link, but it's not live yet.

As tax credit money people have known since October, the low-income housing tax credits (LIHTC) available for commitment in 2011 will be $2.15 times the population estimate, or a minimum per state of $2,465,000. The cap on each state's authority to issue tax-exempt private activity bonds will be $95 times the estimated population or a minimum of $277,820,000.

Last year's population estimates are here. Last year's multipliers are here.

Now we can figure the actual values of credits available for 2011 as well as 2010. To compare, in 2010 the most populous state, California, got a per-capita LIHTC value of $2.10 times 36,961,664 people, or almost $77.62 million in tax credits. In 2011 California gets $2.15 times 37,253,956 people, or almost $80.10 million in credits.

At the other end of the scale, the sparse and windy state of Wyoming, population 544,270, got the minimum of $2,430,000 in 2010. In 2011, having managed to raise its population to 563,626, it still gets the minimum but that's now $2,465,000 in credits.

This matters especially when you realize that each "dollar" of LIHTC is really a right not to pay ten dollars in taxes over ten years that can be sold in advance to a corporation for the indirect but still genuine benefit of poor people. (Well, really, mostly the upper layers of the working class, but that's another subject.) That California difference means three or four more apartment buildings may get built with rents affordable to low-income earners such as teachers and social workers.

It might be better to pay the teachers and social workers more, but the low-income housing tax credit is what we've got, and when there is more of it to go around, that's good news.

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