GO Zone PIS

If you watched Treme on HBO this summer and were met with complete frustration as Albert Lambreaux protested against the closing of a major public housing project complex known in actuality as “Lafitte”, then this story is for you.

Without going into the complexities of why the “HANO Big 4” (the four large public housing complexes owned and operated by the Housing Authority of New Orleans) were shut down and demolished after Hurricane Katrina, the fact is that two of the HANO Big 4 projects, B.W. Cooper and Lafitte, are still in dire straits and sitting in limbo due to Congressional inaction.

After Hurricane Katrina, Congress approved Gulf Opportunity Zone tax credits (GO Zone) as an incentive for investors to direct funding to the hardest hit areas on the Gulf Coast. In order for the investors to claim their tax credits, their projects have to be placed-in-service (PIS) with a
certificate of occupancy (CO), meaning that tenants are allowed to move in, by December 31, 2010. It is no secret that the market for real estate development and the economy in general have been dismal since 2008; consequently these projects were left on the drawing table and never started due to a lack of interest from investors. Although it may not seem like it, investors are now starting to return to the tax credit market and they want to invest in these projects. However, in reality there is no way to get these developments ready for tenants by the end of the year, thus rendering the GO Zone incentives program useless.

In B.W. Cooper and Lafitte alone, there are 840 units to be lost or gained. In total throughout the Gulf, that number is estimated at 2,080 mixed-income units.

Congress needs to approve a two-year extension of the GO Zone PIS deadline (December 31, 2012) in order for these projects to be invested in and completed. While investors are coming to the table, developers will not start building until the deadline is extended because the finances without the tax credits are unfeasible.

The GO Zone PIS extension is currently being considered as a part of S. 3793 the Job Creation and Tax Cut Act of 2010, also commonly referred to as the “tax extenders” bill. The tax extenders bill has fallen victim to the Senate gridlock that has plagued the Congress throughout the 111th session.

Making sure that these public housing projects are delivered to those affected by Hurricane Katrina over 5 years ago is a bi-partisan issue, and is part of a promise the nation made to the Gulf Coast. Contact your Congressional Representatives.

Times-Picayune Article