American Indian housing officials got a detailed how-to demonstration for turning a little money into a lot of housing at a recent meeting in Las Vegas.
Kansas City, Missouri-based Travois, a for-profit consultant, showed how tribes can use the federal Low Income Housing Tax Credit in conjunction with other programs to leverage their housing money and get investors from the dominant culture to invest on their reservations.
A tribe or TDHE (tribally-designated housing entity) with $300,000 can expect to build 2.25 houses with their money, according to a presentation Travois made to the National American Indian Housing Council’s Legal Symposium in December. Or, it can use that amount to do rehabs on about 3.5 units or replace roofs on 25 units.
But by getting outside investor money through the LIHTC, the tribe can build 22 units or rehab 28 with their $300,000 (after developer’s fees), according to the presentation.
The LIHTC is a program regulated by the Internal Revenue Service but administered by state housing finance agencies. It gives investors who are willing to buy equity in low income rental housing projects a dollar for dollar tax credit for their investments. Housing developers pitch projects to the state HFAs, which award money they have access to on a per-capita formula based on state population. Capital market firms called syndicators then sell the tax credits to investors.
Travois has been involved in doing LIHTC projects in Indian country for many years. It says that since 1995, almost $800 million of finance, including more than $500 million from outside investors, has resulted in the construction or rehab of almost 5,000 housing units in 175 developments in Indian country. New Mexico has had the most projects, at 28, followed by Minnesota with 26 and North Dakota with 25.
The LIHTC can help tribes reduce waiting lists, design their own homes, encourage homeownership, rehab existing homes, build communities, meet student housing needs, and improve energy efficiency.
Types of housing that can be built or rehabbed include single-family homes, duplexes, apartments, community facilities, special needs and elderly housing.
One example of an LIHTC project it gave was Spokane Homes 2 on the Spokane Indian reservation in Wellpinit, Washington. The $8.75 million project built 20 single-family homes and rehabbed another 20. It used $7.3 million of tax credit equity along with $1.45 million from the tribe’s Indian Housing Block Grants (IHBG) from the federal government. In addition, the project got a large $6.6 million loan from the Department of Housing and Urban Development’s Title VI program, showing it is possible to leverage existing money through more than one program at a time. The units were built by workers from the Spokane Indian Housing Authority.
Ten housing units were built at the Tshimakian Meadows development, where a community building was also built. Ten homes were built at the New House Lane site. Ten units were rehabbed at Wellpinit Senior Housing, and five apiece at the Martha Boardman and McCoy Lake sites.
NAIHC’s next meeting will be its annual legislative conference, to be held in Washington, D.C. February 9-11. The group will hold its annual meeting in Hawaii this year on May 9-11, in conjunction with insurer AMERIND.