Through a $413 million investment for the development of new construction and rehabilitation in Puerto Rico, the Department of Housing has proposed to work hand in hand with the private sector to address housing needs with innovative projects of high economic and social impact, which will be financed through the new CDBG-DR Gap to Low Income Housing Tax Credits Program (LIHTC).
The need for affordable rental housing stock increased in the aftermath of hurricanes Irma and Maria. In response to this, the Department of Housing plans to add 1,000 new housing units to the local inventory with an investment of $113 million in Community Development Block Grant – Disaster Recovery (CDBG-DR) funds during the first phase of the program, in six new constructions and one rehabilitation project on the Island which, in turn, will boost employment rates as well as the regional and national economies during the construction phase.
The Department of Housing, in conjunction with the Housing Finance Authority (PRHFA), launched the Program to finance multiple projects with individual housing units and speed up the construction or reconstruction qualified projects that are ready to be built.
Projects financed by the Program will develop 69 housing units in the municipality of Coamo, 438 in Caguas, 90 in Humacao, and around 383 in San Juan that will benefit people with low-income, people with disabilities, AIDS/HIV patients, people without a home, the elderly population, and single-parent households.
Over $280 million will be investment in the local construction sector as part of a joint effort between the Program and private developers, which will use environmentally friendly methods and materials and take energy resilience and conservation measures such as EnergyStar® appliances, photovoltaic panels, emergency power generators, and stormproof windows, among others.
Likewise, developments will include the installation of broadband infrastructure, in order to reduce the digital gap in mixed income communities and provide a platform for people and their families to participate in the digital economy and improve their access to economic opportunities.
The LIHTC Program allows developers to claim federal income tax credits in exchange for delivering affordable rental housing. LIHTC offers two forms of tax credits, namely, nine percent (9%) for new construction/rehabilitation, and four percent (4%) for new construction/rehabilitation projects that are partially financed with tax-exempt obligations. According to the Internal Revenue Code (IRC), over a ten-year period, the respective applicable tax credit percentages are those that yield credits with a current value equal to seventy percent (70%) and thirty percent (30%) of the qualified basis of a project.
For more information on the CDBG-DR Gap to LIHTC Program, the Department of Housing has prepared an entire section in its webpage, www.recuperacion.pr.gov, with detailed information on projects, grants, and locations.
