With the credit crunch hurting developers and tax credit financing deals falling apart all over Wall Street, could the use of tax abatements help provide necessary incentives to developers and tenants of the new or rehabilitated senior housing projects? Could abatements from city, school, and county taxes provide developers enough cushion to make their marginal projects profitable or provide enough incentives to relocate their projects to towns and counties that are providing economic incentives for bringing senior housing to their communities? In some part of the country, we have seen communities shun senior housing projects or fail to change zoning laws for fear of losing these tax revenues as seniors begin to inhabit their community. These small incentives may provide an extra percentage point of return to investors that will clear that investor’s investment hurdle rate.
One area that could see improvement as a by product of tax abatements for senior housing is the jobs that would be created through the construction and rehabilitation of senior housing projects and the support staff required to operate the facilities. For municipalities looking to grow, senior housing tax abatements maybe a way to help utilize county lands more effectively and create local jobs thus helping seniors and their communities grow older together.
