March 27, 2007
Contact: Robin Winchell (202) 225-4031
WASHINGTON, DC - U.S. Rep.
Charlie Melancon spoke on the floor of the U.S. House of Representative today
in support of the Katrina Housing Tax Relief Act of 2007 (H.R. 1562), a
bipartisan bill designed to help get affordable housing in the Gulf Coast
region rebuilt quickly. The bill passed the House by a voice vote.
"It is hard to exaggerate the
devastation Hurricanes Katrina and Rita caused in south Louisiana," Rep. Melancon told his
colleagues in his floor speech today. "Over a million people had to flee
their homes, and over 200,000 homes were damaged or completely destroyed."
"There is a severe housing shortage in the region... Average working
people can't move home because they can't find affordable housing.... Extending
these important tax credits will make it feasible for developers to continue
re-building affordable housing in south Louisiana."
The Katrina Housing Tax Relief Act of 2007 helps Katrina and Rita
survivors by:
- Strengthening
tax incentives for building affordable rental housing in
hurricane-affected areas of the Gulf
Coast. The
low-income housing credit is a federal tax credit designed to encourage
development of low-income housing. The Gulf Opportunity Zone Act of
2005 (PL 109-135) increased the amount of low-income housing credits
available in hurricane-affected areas of the Gulf Coast.
However, those benefits were available only if affordable rental units
were built and inhabited by 2008.
The Katrina Housing Tax Relief Act of 2007 strengthens tax incentives to
builders of affordable rental housing by extending the current deadline for GO
Zone tax credits by an extra two years - extending the deadline for units to be
inhabited from 2008 to December 31, 2010. At a hearing earlier this
month, the Ways and Means Committee had learned that one of the key problems
regarding housing in the Gulf Coast region was that the 2008 deadline might not
be met in some hard-hit areas.
The bill also prevents Community Development Block Grants from being taken
into account in determining whether a building is federally subsidized under
the low-income housing credit provisions of the GO Zone Act. Federally
subsidized properties receive a smaller credit than those that are not
subsidized, so this provision ensures that developers could get the larger
credit. This would apply to property built and inhabited by December 31, 2010.
- Expanding access to
low-income financing for homeowners in hurricane-affected areas of the Gulf Coast. Mortgage Revenue
Bonds are tax-exempt bonds that can be used to provide low-interest
financing for home purchases. Generally, the bonds cannot be used to
refinance existing mortgages. This bill would help homeowners in the
Gulf Coast region by modifying the
program to allow funds to be used to refinance existing mortgages on homes
that were damaged by the hurricanes in the area. This provision
applies to financing provided before the end of calendar year 2010.
- Following House
PAYGO rules and using offsets to pay for the relief. The bill
meets the House pay-as-you-go requirements. The bill is fully paid
for by a provision strengthening tax enforcement, as proposed in President
Bush's FY 2008 budget request and as passed by the Senate in its Small
Business and Work Opportunity Act of 2007, which was passed on February 1.
Rep. Melancon added, "Finally, as a fiscal conservative and Blue Dog, I
want to point out that this bill follows House PAYGO rules and will not
increase the deficit. In fact, the offsets contained in this bill - which
involve streamlining some IRS collection rules - will slightly INCREASE
revenue."
Rep. Melancon offered the following comments on the floor of House today
in support of the Katrina Housing Tax Relief Act of 2007:
"Mr. Speaker,
"I am here today to speak in support of the Katrina Housing Tax Relief
Act, which will extend important tax credits and waivers that are boosting
rebuilding efforts along the Gulf
Coast.
"It is hard to exaggerate the devastation Hurricanes Katrina and Rita
caused in south Louisiana.
Over a million people had to flee their homes, and over 200,000 homes were
damaged or completely destroyed. In St. Bernard Parish, a community to
the east of New Orleans
that I represent, it is reported that only five or six homes out of almost
27,000 were inhabitable after the storm. It will take many years to
repair the damage Katrina and the levee failures caused in just a few days.
"The enormous extent of the damage, and the unprecedented time and
money it will take to recover, are why we need to pass the Katrina Housing Tax
Relief Act. For south Louisiana
to rebuild, we need to continue encouraging developers to build affordable
housing, not just high-priced condos. There is a severe housing shortage
in the region, and rental prices have increased by 39 percent and more since
the storm. Home sale prices in suburban parishes have also skyrocketed.
Average working people can't move home because they can't find affordable
housing.
"One of the most important features of this bill is the extension of
Gulf Opportunity Zone low income housing tax credits until the end of
2010. Louisiana
is offering these tax credits to developers who build affordable housing in the
hurricane-affected communities, but current law requires that developers have
the projects built and occupied by the end of 2008.
"In the post-storm world of south Louisiana, this is almost impossible.
The Housing Finance Agency in New
Orleans estimates that 65 percent of the 17,000
affordable housing units under development -- about 11,050 units -- won't make
the deadline to be available for rent by the deadline at the end of 2008.
"Under the normal circumstances, apartment projects would take 18 to 24
months to complete, meaning that even without the special Katrina challenges,
finishing projects by December 2008 would be a tight deadline.
"Add in all the extenuating circumstances in post-Katrina
Louisiana -- mold remediation for flood-damaged rehabilitation projects,
elevating properties, getting permits and going through zoning requirements
under new community planning efforts, not to mention finding the workers and
materials to do the projects, and problems with water, sewer and gas lines --
and there's no way developers can finish in time.
"Extending these important tax credits will make it feasible for
developers to continue re-building affordable housing in south Louisiana.
"Finally, as a fiscal conservative and Blue Dog, I want to point out
that this bill follows House paygo rules and will not increase the
deficit. In fact, the offsets contained in this bill - which involve
streamlining some IRS collection rules - will slightly INCREASE revenue.
"People in south Louisiana and all
along the Gulf Coast need this bill. I urge my
colleagues to vote in favor of the Katrina Housing Tax Relief Act, and help
keep the recovery moving forward. Thank you."
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