More States Consider Tax Breaks for Low-Income Housing Developers

Legislators in five U.S. states this year will consider laws that create a state tax incentive program for low-income housing developers.

2 minute read

March 7, 2022, 10:00 AM PST

By James Brasuell @CasualBrasuell


Riverside, California

Orange Grove / Shutterstock

The lack of affordable housing around the country is inspiring states, namely Iowa, Kansas, Kentucky, North Carolina, and Ohio, to consider new legislation that would create tax breaks for low-income housing developers, according to an article by Kristian Hernández for Pew's Stateline.

"The state programs are designed to supplement the federal Low-Income Housing Tax Credit program, known as LIHTC, which was created in 1986," explains Hernández. These state tax break programs are growing in popularity as more communities around the nation grapple with a lack of housing affordable to lower income households.

"Nationwide, there is a shortage of some 7 million rental homes that are affordable to the lowest income households, according to an annual report released in October by the Public and Affordable Housing Research Corporation and the National Low Income Housing Coalition," writes Hernández. "By 2031 that number could be closer to 8 million, as rent restrictions expire on some 745,000 homes where, because of federal programs, tenants pay less than market rent."

Arizona created its own program in the past year, and legislation in Mississippi came up just short. For insight into the need for a state version of the LIHTC program, the article digs deeper into the Arizona examples, including soundbites from Ruby Dhillon-Williams, assistant deputy director of housing and community development for the Arizona Department of Housing, who says the state has particular need for affordable housing options in rural areas and for rental properties near healthcare facilities.

According to the article, the other 22 states with low-income housing tax credit programs are Arkansas, California, Colorado, Connecticut, D.C., Georgia, Hawaii, Illinois, Maine, Massachusetts, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, Oklahoma, Pennsylvania, South Carolina, Utah, Vermont, Virginia and Wisconsin. Among those states, according to Hernández, Colorado has been one of the most successful in leveraging tax breaks for low-income housing development.

More details and background are available in the source article below.

Wednesday, March 2, 2022 in Pew Stateline

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