NYS Issues Final LIHTC Regulations
(June 16, 2025) On June 11th, NYS published Notices of Adoption of revised regulations for the Low-Income Housing Tax Credit (LIHTC) programs and the State Low-Income Housing Credit (SLIHC) program, which govern the State’s administration of federal tax credits used to support affordable housing development.
The LIHTC program provides a dollar-for-dollar reduction in federal income tax liability for project owners who develop rental housing that serves low-income households with incomes up to 60 percent of area median income. The amount of LIHTC available to project owners is directly related to the number of low-income housing units in the project which they develop.
According to the NYS Homes and Community Renewal (HCR) website, most projects receiving an allocation of LIHTC also utilize another governmental subsidy as part of their project financing. Federal subsidies such as the Community Development Block Grant (CDBG), HOME, and U.S. Department of Agriculture (USDA) Rural Housing Service (RHS) 515 have been used in conjunction with the LIHTC. Project owners use the LIHTC allocation as a gap filler in their development budgets. The LIHTC allocation is converted into private equity to fill the project gaps through the sale of the project and the tax credit to investors.
As anticipated, the revised regulations establish a new distinction between supportive housing projects and projects serving older adults requiring access to services to remain independent. However, the revised regulations do not reflect additional recommendations submitted by LeadingAge NY to support older adults, such as including a set-aside for senior housing projects and exploring opportunities to underwrite an Affordable Independent Senior Housing Resident Assistance model, which would allow properties to maintain a staff person to connect eligible older adults with existing resources and to help coordinate on-site social and wellness programming that could help them age safely in place.
In its assessment of public comment, the State noted that the 9 percent LIHTC Qualified Allocation Plan (QAP) provides sufficient flexibility to allow for a senior housing set-aside in the annual Request for Proposals (RFP), and that the RFP stipulates that each application must meet one or more of the State’s housing goals (which include senior housing). The State also pointed to dedicated capital financing available as outlined in its Senior Housing Program term sheet and the substantial portion of projects that have included serving older adults.
The assessment of public comment further noted that the LIHTC is a development financing source, rather than a source to fund services and operations of a housing project, like a Resident Assistant program. Additionally, the State pointed to the Empire State Supportive Housing Initiative (ESSHI) as a potential source of funding for operational and rental support for frail older adults. ESSHI was designed to create permanent, independent, affordable housing units paired with wraparound supportive services for individuals who are homeless, formerly homeless, or unstably housed and have special needs, conditions, or other life challenges, which may include older adults aged 55 and up who have an unmet housing need, are enrolled in Medicaid, and have either a chronic condition or physical disability.
In addition to its recommendations to support the development and service-connectedness of affordable senior housing, LeadingAge NY had, based on the input of members, recommended that the State allow applicants an opportunity to cure certain deficiencies prior to full proposal submission to support more successful first-time applications. The State declined to adopt this proposal given the availability of existing support through technical assistance sessions, the time constraints in the allocation of 9 percent LIHTCs, and the competitive nature of the application review process (as required by statute).
LeadingAge NY anticipates the release of the 9 percent RFP incorporating the recently published regulatory changes by fall 2025. The association will continue to work with its members, advocacy partners, and LeadingAge counterparts to understand the impacts of the revisions on opportunities to develop affordable housing that supports the independence and well-being of older adults, and to advocate for regulatory and procedural changes that enhance those opportunities. Members with experience or interest in utilizing these programs to develop and operate senior housing projects are encouraged to contact Annalyse Komoroske Denio, Senior Policy Analyst for LeadingAge NY, to share their feedback.
Contact: Annalyse Komoroske Denio, akomoroskedenio@leadingageny.org, 518-867-8866