15 Oct

Social Security: “No COLA for 2016″

According the the Social Security Administration website: mailbox_with_custom_check_14221 (1)

With consumer prices down over the past year, monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 65 million Americans will not automatically increase in 2016.

The Social Security Act provides for an automatic increase in Social Security and SSI benefits if there is an increase in inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The period of consideration includes the third quarter of the last year a cost-of-living adjustment (COLA) was made to the third quarter of the current year. As determined by the Bureau of Labor Statistics, there was no increase in the CPI-W from the third quarter of 2014 to the third quarter of 2015. Therefore, under existing law, there can be no COLA in 2016.

Other adjustments that would normally take effect based on changes in the national average wage index also will not take effect in January 2016. Since there is no COLA, the statute also prohibits a change in the maximum amount of earnings subject to the Social Security tax, as well as the retirement earnings test exempt amounts. These amounts will remain unchanged in 2016. The attached fact sheet provides more information on 2016 Social Security and SSI changes.

The Department of Health and Human Services has not yet announced Medicare premium changes for 2016. Should there be an increase in the Medicare Part B premium, the law contains a “hold harmless” provision that protects approximately 70 percent of Social Security beneficiaries from paying a higher Part B premium, in order to avoid reducing their net Social Security benefit. Those not protected include higher income beneficiaries subject to an income-adjusted Part B premium and beneficiaries newly entitled to Part B in 2016. In addition, beneficiaries who have their Medicare Part B premiums paid by state medical assistance programs will see no change in their Social Security benefit. The state will be required to pay any Medicare Part B premium increase.

Information about Medicare changes for 2016, when available, will be found at www.medicare.gov.

The above announcement can be found HERE.

Further information on the COLA can be found HERE.

27 Aug

Which Accessibility Laws Apply to my LIHTC Property?

504Projects ready for first occupancy since March of 1991 are subject to Fair Housing design requirements. Therefore, the vast majority of tax credit properties are covered under these Fair Housing accessibility standards. Section 504 of the Rehabilitation Act is far more restrictive than Fair Housing and applies to federally funded projects. LIHTC involvement itself does not trigger the application of 504 standards at a property. However, other programs at an LIHTC property, will. Examples of 504 projects include those funded by HUD, HOME, or Rural Development.

There is one exception to the general rule that conventional tax credit properties do not have 504 requirements. The Tax Credit Assistance Program (TCAP) was a temporary program funded in 2009 that went into many LIHTC projects the next few years. TCAP was a measure to address the recession and provided funding to LIHTC projects that needed cash in addition to what investors provide. Although in most ways TCAP funding acted like normal tax credits, the funding was actually a type of HOME funding. Because of this, several cross-cutting requirements from the HOME program were attached to TCAP-assisted projects. One of these requirements is 504 accessibility.

In summary, most LIHTC projects must follow the Fair Housing Act accessibility requirements. Project with additional funding (HUD, RD, HOME, TCAP) have additional 504 requirements. One final note: your state LIHTC agency may impose additional accessibility requirements, up to and including 504 standards. You may check the governing documents for your project or you HFA state staff to see if such is the case.

27 Jul

3 Important Recent News Items: Fair Housing and LIHTC Administration



July 23: GAO Recommends Joint IRS-HUD Oversight of the LIHTC Program

The U.S. Government Accountability Office (GAO) released its report on federal oversight of the Low Income Housing Tax Credit program, which concludes that there are deficiencies in the Internal Revenue Service’s (IRS) oversight of the program and recommends that Congress consider designating HUD as a joint administrator of the program.

Zeffert notes: This potentially has major implications for how the LIHTC is administered. Future results of this report should be watched closely by all LIHTC professionals. 

July 16: HUD Issues Affirmatively Furthering Fair Housing Final Rule

HUD published the Affirmatively Furthering Fair Housing (AFFH) final rule in the Federal Register. HUD’s page with further information and related tool can be found HERE. The rule’s effective date is August 17, 2015.

June 25: Supreme Court Upholds Disparate Impact Standard for Violations of the Fair Housing Act

In a 5-4 decision, the Supreme Court issued its opinion ruling that disparate impact claims may be used to support plaintiffs’ claims of alleged Fair Housing Act (FHA) violations. Justice Kennedy wrote the Court’s opinion, joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan in the case of the Texas Department of Housing and Community Affairs (TDHCA) v. Inclusive Communities Project, Inc. The decision remanded the case to the lower courts for further proceedings consistent with the Supreme Court’s opinion.

Zeffert notes: This potentially has major implications for how Fair Housing works, as intended equal treatment may actually be discriminatory. Future HUD guidance should be watched closely by all multi-family housing professionals.