If signed by the Governor Hochul, New York State Senate Bill S9571 could meaningfully reshape how the New York State Low-Income Housing Tax Credit (SLIHC) program is used to finance affordable housing projects.
The SLIHC program leverages private investment to produce and preserve affordable housing. Proponents of the bill argue it strengthens the important affordable housing finance tool at a time of rising construction costs, higher interest rates and constrained capital markets.
Under the existing SLIHC statute, SLIHCs can only be transferred once — effectively limiting their liquidity and keeping them tied to the initial purchaser. The proposed legislation would permit multiple subsequent transfers of the SLIHCs, subject to oversight by the New York State Division of Housing and Community Renewal, without jeopardizing the underlying project’s eligibility for the credits.
Why this matters:
- Improved liquidity: Allowing repeat transfers could make SLIHCs more marketable and easier to monetize.
- Potential for a secondary market: Increased transferability may support a broader marketplace for credits, attracting new participants.
- Greater capital flexibility: Developers could have additional tools to bridge financing gaps, particularly in challenging capital markets.
- Expanded investor base: Credits may flow to buyers better positioned to utilize them efficiently.
- Less reliance on public subsidy: Enhanced private-market activity could help supplement limited governmental resources.
If enacted, this change would bring added flexibility to the state credit regime and could influence how affordable housing transactions are structured in New York going forward.
Summer Associate Ashanti R. Nelson contributed to this report.
For further details on how the increased transferability of SLIHCs might impact your projects, or if you have questions for our lawyers, please reach out to attorney Michael A. Discenza at (212) 912-3605 and mdiscenza@harrisbeachmurtha.com, or the Harris Beach Murtha attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
Harris Beach Murtha’s lawyers and consultants practice from offices throughout Connecticut in Bantam, Hartford, New Haven and Stamford; New York State in Albany, Binghamton, Buffalo, Ithaca, New York City, Niagara Falls, Rochester, Saratoga Springs, Syracuse, Long Island and White Plains; as well as in Boston, Massachusetts, and Newark, New Jersey.