Doorway Opens For 65 Affordable Housing Units In West Orange

WEST ORANGE, NJ — A housing project for senior citizens in West Orange beat out some stiff competition for a share of federal Low Income Housing Tax Credits, state officials announced Thursday.

The New Jersey Housing and Mortgage Finance Agency’s (NJHMFA) revamped its guidelines for the 2019 awards, which included $22 million in annual 9 percent Low Income Housing Tax Credits (LIHTC). The highly competitive tax credits are expected to generate $214.7 million in private investment to create 17 developments totaling nearly $325 million, officials said.

Under the federal LIHTC program, each state has the ability to craft its own allocation plan and define the criteria for awarding tax credits.

In West Orange, a project spearheaded by The Alpert Group and referred to as “West Orange Senior Housing” will get funding to construct 65 affordable income apartments.

Along with four other senior-related projects, The Alpert Group will share $6,430,373 in tax credits as part of the awards. Together, those projects will create 378 affordable apartments, officials said.

According to a news release from the NJHMFA:

“The LIHTC program, which was established by the Tax Reform Act of 1986, is the most prolific source of funding for new affordable rental apartments for residents. Under this administration to date, NJHMFA has financed or awarded tax credits toward the creation or rehabilitation of over 6,400 affordable apartments across the state, including more than 330 special needs beds, and an additional 440 market-rate apartments with a total development cost of $1.45 billion.”

Here's how it works, the NJHMFA states:

“Under the LIHTC program, federal tax credits are awarded to developers to build new apartments or rehabilitate existing apartments. Typically, the tax credits are sold to investors who then provide private equity to fund construction. In return, the investors receive a dollar-for-dollar reduction on their federal tax returns for a period of 10 years. The equity generated from the sale of the tax credits can fund approximately 70% of a project. This additional capital lessens a developer’s debt burden and allows the project to carry a smaller mortgage. Consequently, rents will be more affordable to low- and moderate- income residents who qualify.”

“Low Income Housing Tax Credits make it financially possible to build and rehabilitate affordable housing for residents in New Jersey, which is why it is such a critical federal program,” said Lt. Governor Sheila Oliver, who serves as commissioner of the Department of Community Affairs and NJHMFA board chair.

“Governor Phil Murphy and I remain committed to the production of safe, decent and affordable housing through the LIHTC program and New Jersey’s Affordable Housing Trust Fund – these are the engines that help drive our mission to ensure that everyone has a place to call home,” Oliver said.

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