|
|
|
| |
 |
 |
|
 |
||
|
Proposed Regulations: LIHTC Utility Allowances
On NMHC/NAA have led the industry effort for such a change since 2004. Current IRS rules require tax credit rents to include a utility allowance for resident-paid utilities; however, the methods currently used to estimate the resident’s utility cost tend to overestimate them. This, in turn, reduces the gross rent received by owners. In 2005, an NMHC/NAA-led coalition submitted a proposal to the IRS that would allow owners to use more accurate data to calculate resident-paid utilities. The IRS proposal expands the means available to property owners to calculate resident-paid utilities and represents a significant victory for apartment firms. Specifically, the proposal would allow state LIHTC allocating agencies (typically state housing finance agencies) to provide utility estimates. It would also allow property owners to submit data from their utility company or use the data from a new HUD utility modeling program. The proposed rule also allows for a grace period before rents can be adjusted during the initial stabilization period, a provision sought by NMHC/NAA. It would require rents to remain unadjusted for a period of one-year, or until the property has achieved 90 percent occupancy for 90 consecutive days, whichever comes first. This provision will allow properties to stabilize before rents are lowered to account for increased utility charges. Members interested in this issue can contact NMHC’s Vice President of Capital Markets and Technology, Dave Cardwell, at dcardwell@nmhc.org or 202/974-2336 for more information. Related Files 
National Multi Housing Council
1850 M Street, N.W., Suite 540, Washington, D.C. 20036-5803 - 202.974.2300 - 202.775.0112 (FAX) © Copyright 1997–2005 National Multi Housing Council. All Rights Reserved. |
|
||||||||||||||||||||||||||||
