Existing federal law establishes a federal income tax credit in an amount equal to a certain percentage of the costs of constructing a low-income housing project. Under existing federal law, to be eligible for this credit, a certain percentage of the residential units in the project are required to be subject to certain affordability restrictions that set a limit on the income level of occupants of the units and restrict the amount of rent that may be charged to such occupants. An owner of property that is part of the low-income housing project that wishes to receive the federal low-income housing tax credit is required to enter into an agreement with a housing credit agency in which the owner commits to maintain the affordability restrictions on the property for a compliance period of 15 years and an additional period of time of at least 15 years following the compliance period. However, existing federal law authorizes an owner, after the 14th year of the compliance period, to request that the housing credit agency find a buyer to purchase the property. The housing credit agency then has 1 year to find a buyer for the property that will maintain the affordability restrictions. If the housing credit agency does not present the owner with a qualified contract for the acquisition of the property within the 1-year period, the affordability restrictions on the property terminate, subject to a 3-year period in which the owner is generally prohibited from raising certain rents and evicting existing tenants. (26 U.S.C. § 42) Existing state law designates the Housing Division of the Department of Business and Industry as the housing credit agency for the State that allocates and distributes the federal low-income housing credit. (NRS 319.145)
Sections 3 and 4 of this bill require the owner of any housing which has been financed by the federal low-income housing tax credit or any other money provided by a governmental agency and that is subject to affordability restrictions similar to those required for eligibility for the federal low-income housing tax credit to provide written notice before terminating an affordability restriction or before the expiration of the affordability restriction, as applicable. Sections 3 and 4 also set forth the contents for such a notice and require the notice to be provided to each tenant, the Division and certain other persons not less than: (1) twelve months before the owner submits a request to the Division for a qualified contract; or (2) if such a request is not applicable, 12 months before the date upon which the affordability restriction will expire. Sections 3 and 4 further authorize the Division to: (1) impose an administrative penalty upon an owner who fails to provide the required notice; and (2) prohibit an owner who terminates an affordability restriction from applying to the Division for an allocation of federal low-income housing tax credits for a period not to exceed 5 years.
Section 5 of this bill requires an owner that will voluntarily maintain an affordability restriction on housing after the expiration of the affordability restriction to provide written notice to the Division not less than 12 months before the expiration of the affordability restriction and, thereafter, submit an annual report to the Division for as long as the owner voluntarily maintains the affordability restriction. Section 5 also requires the owner to provide written notice at least 12 months before ending the voluntary affordability restriction to the county, the city, the Division and each tenant.
Section 6 of this bill provides that the provisions of this bill apply to: (1) every owner of housing that is subject to an affordability restriction on or after October 1, 2021; and (2) every owner of housing that on October 1, 2021, has voluntarily maintained an affordability restriction after the expiration of the affordability restriction.