Land Trust awarded $500k in state tax credits; money raised will be used to upgrade affordable housing
CONCORD — More than $4.1 million in state tax credits have been awarded through the Community Development Finance Authority Tax Credit Program to 12 New Hampshire organizations for projects which make local communities thrive and become more resilient. The CDFA Board of Directors has approved the funding for projects from Nashua to Bethlehem and Lisbon to Portsmouth. The tax credits allow for more than $20 million in leverage for these projects.
"The success of the CDFA tax credit has become our greatest challenge. This is the first year in our history in which we've had to turn down more projects than we've funded and the majority of those project approved were awarded at a lower level than requested," said board Chair Janet Ackerman.
Among the awards was $500,000 in tax credits to the Laconia Area Community Land Trust. The award will be put toward construction activities through their Portfolio Strengthening Initiative. The goal is to upgrade 60 units of affordable family rental housing throughout Laconia, many of which are showing significant wear and tear.
Grants made to these organizations are tax credits, not cash. Companies that donate to these CDFA-approved projects can get a 75 percent business tax credit against their contribution. This credit can be applied against the New Hampshire business profits, business enterprise, or insurance premium taxes. The organizations awarded state tax credits are responsible for raising donations in that amount from for-profit companies that have a New Hampshire state tax liability. It provides a powerful incentive to stimulate private investment in community development ventures.
"This allows the businesses an unprecedented opportunity to direct their support for these efforts in their own communities. The tax credit allows them to maximize their financial impact that a cash donation could not," said Kathy Bogle Shields, CDFA Executive Director.
"Given the financial pressures on the organization this year, the board feels good about the community development projects they were able to fund. We feel these initiatives have the greatest chance of affecting positive change in their communities," said Ackerman. More than $12 million in requests were made; the majority of winning projects had their requests significantly cut.
By statute, CDFA tax credit awards are capped $5 million a year. The balance of this year's $4.1 million allocation will cover funds rolled over from the previous year. Despite the explosive growth in participation from nonprofits and financial commitments from New Hampshire businesses, the tax credit cap has not been raised since 1999.