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Council presses DHCD on return of $3.1 million in LIHTC tax credits and agency capacity
Summary
Committee questioned DHCD Director Colleen Green about returning $3.1 million in LIHTC tax credits allocated during the pandemic and about agency capacity to implement a tenant-buyout filing program; DHCD cited pandemic-era construction delays and limited pipeline capacity to reassign credits.
At length during the hearing, Councilmembers pressed DHCD Director Colleen Green about why the agency reported $3.1 million in tax credits were returned to the national LIHTC pool for calendar-year filings tied to prior allocations.
Director Green said the credits in question were allocated in 2020–2021, and that projects required a placed-in-service date within two years of allocation; pandemic-era construction delays, supply-chain disruption and other market factors prevented developers from meeting those deadlines, she said, and when projects could not be placed in service the credits were returned or swapped. "We returned $3,100,000 in tax credits," she confirmed to the committee, adding that the credit value varies with investor markets and is not a simple cash figure.
Members repeatedly asked whether the agency could have anticipated the returns earlier or redeployed the credits to other projects. Green said DHCD inspects projects at 50% and 75% completion, negotiates with developers, and attempts to find eligible projects that can absorb credits, but that in the 2020–21 cohort the pipeline and eligible basis were constrained. Multiple councilmembers pressed for a more detailed after-action review and asked DHCD to provide lists of projects and a timeline for why credits could not be reallocated.
On related oversight, witnesses and members also raised concerns about HPAP fund transfers and the Department's capacity to administer a new buyout-notification program; Green said DHCD lacks litigation and tenant-representation capacity for that enforcement role without added authority and resources. The committee requested follow-up materials from DHCD on returned credits, projects affected, and HPAP transfers.
