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U.S. Treasury’s Community Development Financial Institutions Fund Aims to Revitalize Low-Income and Distressed Neighborhoods

The District of Columbia Housing Enterprises, a subsidiary of the D.C. Housing Authority, received $33 million in New Market Tax Credit (NMTC) awards on Thursday, according to an announcement by the U.S. Department of the Treasury’s Community Development Financial Institution Fund.

D.C. Housing Enterprises was established in 2002 to support DCHA’s mission to develop affordable house, create healthy communities, and facilitate avenues for our clients to become self-sufficient. DCHE will use the NMTC funding to assist the schools, parks, and other facilities that help grow neighborhoods, but have difficulty getting financing from traditional sources.

“The District of Columbia Housing Authority consistently looks for creative ways to further our mission with our clients,” said Pedro Alfonso, DCHA chairman. “These tax credits will help finance catalytic, high-impact projects in the District.”
Adrianne Todman said, “This allocation will allow DCHA to continue the level of investments we have capitalized at sites like Howard Theater, UNCF Headquarters, Canal Park, and Educare. I look forward to using this year’s award to generate jobs and enhance amenities in our communities.”

In 2009, DCHE received $50 million in NMTC funding. Through combinations of low-interest loans, equity investments, and working with other community organizations, DCHE invested in several projects that enhanced neighborhoods in the District.

A low-interest loan and equity investment from DCHE helped fill the financing gap to renovate Howard Theater. The equity provided the theater a working capital cushion as it re-established itself as a cultural destination, while the low interest rate minimized pressure on the theater’s cash flow as it built its revenue stream.

More than $13 million in DCHE loans supported the development of Canal Park in Southeast. Previously vacant lots and empty warehouses, the $25.2 million Canal Park helped change the dynamics of the surrounding community, attracting new residents, commercial uses, and retail businesses.

The New Markets Tax Credit Program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making equity investments in vehicles known as Community Development Entities. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. The Community Development Entities in turn use the capital raised to make investments in low-income communities.

Nationwide, a total of 87 organizations received $3.5 billion in New Markets Tax Credit awards aimed at revitalizing low-income communities and increasing economic opportunity nationwide under the calendar year 2013 round of the New Markets Tax Credit Program. The allocatees, which will receive tax credit allocation authority, represent 32 different states and the District of Columbia. They were selected from a pool of 310 applicants that requested over $25.9 billion in allocation authority.

 

Last modified: 6/10/2014 10:25:11 AM