Senator Seeks Administration's Support in Obtaining Low-Income Housing Credit Extension for GO Zone

I write to you regarding the extension of the placed-in-service deadline for affordable housing developments in the Gulf Opportunity (GO) Zone. As you well know, the widespread destruction from Hurricanes Katrina and Rita has increased the need for affordable housing in the Gulf Coast. GO Zone low-income housing tax credits are vital to ongoing efforts to restore these units. However, the difficult economic conditions have prevented many of these projects from moving forward at the pace necessary to meet the current placed-in-service deadline of January 1, 2012.

Overall, Congress provided the impacted states (Louisiana, Mississippi, and Alabama) a total allocation of $323 million in low-income housing tax credits to rebuild from the 2005 storms. To date, 29 projects using $51 million in GO Zone Low Income Housing Tax Credits have yet to be placed-in-service and will not be able to do so by the end of 2011. Without this extension, nearly 3,000 Gulf Coast units are unlikely to be completed and 3,500 construction-related jobs are in jeopardy. The loss of more than $582 million in economic activity -- to the construction industry, suppliers, professionals, developers and others -- would be a major blow to the Gulf Coast region.

These projects include 2,230 units in Louisiana and include key projects from 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 2,000 apartments in the four biggest public housing developments in the city (B.W. Cooper, Lafitte, St. Bernard, and C.J. Peete). It is my understanding that approximately 878 of the remaining 2,230 units in Louisiana are part of the "Big Four." The Big Four also has approximately $17.2 million -- or over 50 percent -- of the remaining $33.4 million of unused GO Zone tax credits. Given the enormous Federal investment in the region, as well as the Department of Housing & Urban Development's current efforts to reform HANO, it is essential that we secure an extension of this deadline.

With this in mind, I have worked over the past two years with a bipartisan group of Gulf Coast senators to secure Congressional approval of the placed-in-service extension from January 1, 2011 to January 1, 2013. Last December, with your help, the Congress approved a one-year extension -- through January 1, 2012 -- as part of Public Law 111-312. Without a two year extension through 2012, however, I am concerned that investors will shy away from these credits out of fear they will expire before they can be utilized. Developers, particularly of larger scale projects such as Lafitte and B.W. Cooper, will struggle to complete these projects within the shortened one-year timeframe. As the Congress prepares to consider various pieces of tax-related legislation, I write to request the Administration's formal position on the placed-in-service extension. I also respectfully request that the Administration support bipartisan, bicameral efforts to quickly pass stand alone legislation resolving this issue once and for all.

In closing, I reiterate that we are at a critical juncture in the Gulf Coast's recovery. The President's stated commitment to recovery offers the potential to build a solid foundation for the recovery of our Gulf Coast region. The recovery of south Louisiana and the Gulf Coast can serve as an important model for other areas hit by catastrophic disasters. I believe that securing the placed-in-service extension will serve as an important catalyst to bring more Gulf Coast families home and rebuild smarter, more livable communities.

Again, thank you for your continued work on behalf of families and communities throughout Louisiana and the Gulf Coast.

With warmest regards, I am