The following is a memo by Regional Housing Legal Services Staff Attorney, Jack Stucker, regarding the IRS Concerted Community Revitalization Plan. If you or your organization would like assistance crafting comments or have any questions about the Notice, contact Jack at jstucker@rhls.org.
The Low Income Housing Tax Credit typically leaves project specific scoring preferences up to the local allocating agency through the Qualified Allocation Plan process. There are, however a few statutorily required preferences.1 The most subjective of these involves a preference for projects in Qualified Census Tracts that contribute to a Concerted Community Revitalization Plan. While Qualified Census Tract is a well understood defined term2 which encompasses many low income communities, the parameters of what constitutes a Concerted Community Revitalization Plan remain murky.
This required preference is important because it encourages strategic investment to revitalize low income communities while helping to avoid simply ‘warehousing’ affordable housing in economically depressed areas.
Historically the IRS has not offered any guidance on what constitutes a Concerted Community Revitalization Plan. Local allocating agencies have made good faith efforts to define such through the Qualified Allocation Plan process. In Pennsylvania, PHFA has taken a detailed thirteen point approach to accessing a proposed project’s contribution to community revitalization. However without federal guidance, there is no uniformity between allocating agencies’ approaches. Without definition, there is no meaningful possibility of enforcement.
The recent IRS notice does little to clear up the requirement other than offering the guidance that a Concerted Community Revitalizations Plan must involve components in addition to LIHTC project itself. The IRS issued the notice to call for comments to help further clarify what is, and what is not, a Concerted Community Revitalization Plan.
There are many competing interests to balance with any approach to a national definition of a Concerted Community Revitalization plan in the LIHTC program. Anyone concerned with community revitalization or low income housing siting generally should be interested in this notice from IRS and consider submitting comments.
Comments are due February 10, 2017 and should be submitted by email to the following with “Notice 2016-77” in the subject line:
Comments@irscounsel.treas.gov.
Or by mail to:
Internal Revenue Service
Attn: CC:PA:LPD:PR (Notice 2016-77)
Room 5203
P.O. Box 7604
Ben Franklin Station
Washington, D.C. 20044
1While there is a list of many factors allocating agencies are permitted to give preference to the Low Income Housing Tax Credit program contains the statutory requirements that a preference is give to projects that (I) serving the lowest-income tenants, (II) are obligated to serve qualified tenants for the longest periods, and (III) are located in qualified census tracts and the development of which contributes to a concerted community revitalization plan. IRC Section 42(m)(1)(B)(ii)
2Qualified Census Tract is defined but the Department of Housing and Urban Development as a tract containing 50 percent of households with income less than 60 percent of area median income or a poverty rate of at least 25 percent. IRC Section 42(d)(5)(B)(ii)