Landrieus GO Zone Tax Credit Placed in Service Extension Amendment Adopted Unanimously by Senate
WASHINGTON — The U.S. Senate today unanimously approved U.S. Senator Mary Landrieu's, D-La., amendment to extend the placed-in-service deadline for workforce housing developments in the Gulf Opportunity (GO) Zone. The extension is needed to ensure that public housing reconstruction in Louisiana, Mississippi and Alabama in the wake of Hurricane's Katrina and Rita is not unnecessarily halted. Sen. Landrieu's amendment extends the GO Zone Low Income Housing Tax Credit placed-in-service date from January 1, 2011 to January 1, 2013. Without this extension, almost 6,200 Gulf Coast units are unlikely to be completed and an estimated 13,000 construction-related jobs are in jeopardy.
The full tax-related jobs package is expected to be voted on sometime next week.
"The housing market crash delayed GO Zone construction progress and as a result, the completion deadlines were unrealistic and impossible to make, despite our best efforts," Sen. Landrieu said. "Extending the placed-in-service deadline will ensure that construction of more than 6,000 housing units is not abandoned and that working families in South Louisiana have a place to call home. Turning our backs on these housing developments would be a devastating setback for hurricane recovery, and one Louisiana cannot afford."
Sen. Landrieu secured support for the extension from the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury. In a joint letter to Sen. Landrieu, HUD Secretary Shaun Donovan and Treasury Secretary Tim Geithner urged Congress to extend the GO Zone placed in service date by two years.
Today, Secretary Donovan welcomed the Senate's approval of Senator Landrieu's GO Zone amendment.
"I want to applaud the United States Senate and Senator Mary Landrieu in particular, for taking this important step toward the Gulf Coast's continued revitalization," Sec. Donovan said. "The GO Zone tax credits have driven redevelopment efforts and stimulated local economies in these devastated areas, helping to enable families to return to their communities more quickly. GO Zone projects have created jobs and helped to return much needed affordable housing to the Gulf Coast. In New Orleans specifically, the tax credits have been particularly important to help leverage financing to restore affordable housing in the 'Big Four' public housing developments: St. Bernard, C.J. Pete, Lafitte, and B.W. Cooper. The Obama Administration is committed to ensuring that the tragedy of disasters and their aftermaths leads to better housing and stronger neighborhoods. We don't want to rebuild the Big Four as they existed before, we want to rebuild them better, smarter, and safer. The extension of the GO Zone credits will provide the flexibility for new developments to serve as economic engines for communities that are more viable. We now have an opportunity, not only revitalize New Orleans, but also to use the Crescent City as a model for building more livable, accessible, and sustainable cities across the country."
Overall, Congress provided Louisiana, Mississippi, and Alabama $323 million in low-income housing tax credits to rebuild from the 2005 storms. To date, 77 projects with over $80 million tax credits at stake have yet to be placed-in-service. Without this extension, the Gulf Coast would lose more than $1 billion in economic activity not to mention thousands of jobs. The construction industry, suppliers, professionals, developers, and those families seeking affordable housing would all be negatively affected.
These outstanding projects yet to be placed in service include 3,300 units in Louisiana and include projects at the Housing Authority of New Orleans (HANO) - specifically the B.W. Cooper and Lafitte public housing sites, which are so crucial to redevelopment in the New Orleans area. In particular, HANO received almost $500 million in Federal funds to redevelop 4,500 apartments in the four biggest public housing developments in the city (B.W. Cooper, Lafitte, St. Bernard, and C.J. Peete). It estimated that 1,800 of the remaining 3,300 units in Louisiana are part of the "Big Four." The Big Four also has approximately $33.4 million - or almost 70 percent - of the remaining $47.9 million of unused GO Zone tax credits.
For a copy of the full letter from HUD and the Treasury, visit: http://landrieu.senate.gov/mediacenter/upload/Response_to_Landrieu_PIS_Letter.pdf