The gulf states are still living with the destruction wrought by Hurricanes Katrina and Rita, which swept away more than 70,000 units of affordable rental housing.
Fewer than a third of those units, which are crucial to housing the poor, the elderly and the disabled, have been rebuilt. The 5,000 or so that are still on the drawing board might never be constructed unless Congress extends a program that encourages businesses to invest in housing by providing them offsets for tax liabilities.
Congress tried to remedy the problem late last year by passing a one-year extension of the program. But investors insist that they need another 18 months to get the deals done, the units built and the tenants in place. If the projects come in late, the tax credits become invalid.
Congress allotted more than $300 million in credits to the gulf states after Katrina and Rita, requiring that the projects be ready for tenants by the end of 2010. The credits sold well while the economy was thriving. But demand fell off during the recession when corporate investors had small tax liabilities.
The appetite for tax credits has picked up, but investors are still shying away from the gulf out of fear that any credits they purchase might expire before they can be used. Unable to raise capital, some developers have walked away from projects that seemed certain to get built before the onset of the recession.
A Senate bill introduced by Mary Landrieu, a Democrat of Louisiana, with the support of several Republicans, would extend the program for an additional year. The bill, which still needs a sponsor in the House, deserves to pass as swiftly as possible. Without it, the gulf states are unlikely to get the housing they need.