Real Estate & Land Use Newsletter: Low Income Housing Tax Credits Found Not to Trigger Prevailing Wages

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In a decision filed on April 23, 2008, the First Appellate Court of Appeal determined that Low Income Housing Tax Credits (LIHTCs) do not constitute public funds in the context of Labor Code Section 1720 and therefor do not trigger a requirement for the payment of prevailing wages on low income housing projects for which LIHTCs are granted. State Building and Construction Trades Council of California v. Duncan (A115491 and A115663, April 23, 2008). The court reasoned that tax credits are at best intangible inducements offered by government, but not actual expenditures by the government. Accordingly, they do not qualify as either the payment of the equivalent of money by the state or the transfer by the state of an asset for less than fair market value.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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