American Recovery and Reinvestment Act of 2009 – Real Estate, Construction and Development
The American Recovery and Reinvestment Act of 2009 (ARRA), the economic stimulus legislation signed into law on February 17, 2009, is intended to provide numerous real estate investment opportunities through a combination of domestic spending programs and tax incentives.
Billions of dollars have been appropriated for projects involving construction, repair and rehabilitation of schools, healthcare facilities, government buildings and public housing. ARRA also emphasizes the “greening” of facilities benefiting from government stimulus as well as a commitment to future projects focused on renewable energy. Additionally, the new legislation appropriates billions toward infrastructure improvement, including substantial funding for the improvement of highways, bridges, electrical grid, control of flood and storm damage, water and waste water management.
Businesses, investors and governmental entities will need to adapt to the new economic environment by structuring their real estate transactions to take full advantage of the benefits created by ARRA.
Highlighted Spending Provisions Related to Real Estate, Construction and Development
- $2 billion in funding of emergency assistance for the redevelopment of abandoned and foreclosed homes.
- $4 billion in funding the Public Housing Capital Fund to carry out capital and management activities for public housing agencies.
- $2.25 billion in funding capital investments in low-income housing tax credit projects.
- $250 million for grants or loans for energy retrofit and green investments to owners receiving HUD project-based assistance.
- $1 billion in funding for construction and improvements of long-term care facilities for veterans and improvements at VA national cemeteries.
- $1 billion in funding of the Community Development Block Grant program for community and economic development projects.
- $27.5 billion in funding for highway and bridge construction, rehabilitation, repair and restoration.
- $5.5 billion to fund the Federal Buildings Fund for construction, acquisition, repair and alterations of federal buildings, United States courthouses and border stations.
Highlighted Tax Incentives Related to Real Estate, Construction and Development
- Recovery Zone Bonds: creates a new tax category of tax credit bonds for investment in economic recovery zones with significant poverty, unemployment or home foreclosures.
- Qualified School Construction Bonds: creates a new tax category of tax credit bonds for construction, rehabilitation or repair of public school facilities or for the acquisition of land on which a public school facility will be constructed.
Troutman Sanders Uniquely Positioned to Serve Clients
While this alert summarizes certain highlighted sections of the new legislation, the text of ARRA leaves open a number of questions which likely will be addressed, at least in part, by additional regulations and other legislative guidance.
Troutman Sanders offers its private and public clients an experienced real estate team able to assist with these questions and the real estate opportunities that will be created by ARRA through a multi-disciplinary legal practice with expertise in project development and finance, public finance, energy, transportation, construction, government contracts, regulatory and government law, environmental and natural resources, zoning and land use, legislative, tax, lending and structured finance, mergers & acquisitions and business ventures, healthcare, telecommunications and technology.
In addition, Troutman Sanders Strategies, our full-service government relations group, is uniquely positioned in Washington D.C. and numerous other states and municipalities to advocate our clients' public policy issues, including providing our clients access to ARRA funding decision makers, through a broad array of contacts at the federal, state and local levels in order to build better partnerships among governments and businesses.