(The Center Square) – Democratic state Rep. Dagmara Avelar is among the group of lawmakers in Springfield leading the charge to usher in a new state tax credit for affordable housing.
The so-called “Build Illinois Homes Tax Credit” legislation included in House Bill 2044 and Senate Bill 1737 would be similar to a federal program now overseen by the Illinois Housing Development Authority and Chicago Department of Housing that currently helps foot the bill for affordable housing across the state.
“Our state is facing an affordable housing crisis, stemming from years of housing under-production,” Allison Clements, executive director of IHC, testified in a recent Senate committee. “Our state’s housing deficit has grown 64 percent since 2012, meaning we have more people needing homes than are available.”
Among those likewise pushing for change in the form of the bill’s passage has been the Illinois Housing Council, a non-profit membership association consisting of over 260 businesses and non-profits.
Even with the current federal program, a 2023 IHC report highlighted that Illinois still has a deficit of low-income housing, losing 13% of its low-rent units over the last decade. In addition, while there are more than 450,000 extremely low-income renters in Illinois, there are only about one-third of that many affordable and available rental units.
“The dollars have actually filled a critical need but they are only a short-term solution to build affordable housing in Illinois,” added Dagmara, the lead sponsor of HB 2044. “The long-term, permanent solution is a state tax credit, the Build Illinois Homes Tax Credit that can sustain affordable housing construction over the next 10 years.”
“Build Illinois Homes” comes with a price-tag in the neighborhood of about $35 million for 10 years and is being promoted as a plan that will help increase the number of housing units by 3,500 each year.
Clements stressed that state tax credits will only kick in after the construction of a unit is complete and qualified tenants are able to call it home.
“Private sector investors, not taxpayers, are going to bear the financial risk of a project not being completed or successful and they closely monitor and oversee each development where these credits are involved,” she added. “Because the state tax credit is not claimed by an investor until the affordable housing is successfully built and completed, passing this state tax credit this year would not result in any budget impacts to the state until 2026.”
Currently, more than 20 states now use tax credits to attract private equity for building more affordable housing, with lawmakers in Kentucky and Ohio now weighing the option of enacting such legislation.
Earlier this year as part of his Feb. 15 budget address, Gov. J.B. Pritzker proposed additional funds for housing through “Home Illinois,” a program that would provide for a $50 million increase in homelessness services, including for emergency shelter, short-term rental assistance and the development of new permanent supportive housing units. With the governor estimating that more than 120,000 people experience homelessness annually and over 76,000 children live in overcrowded shared housing, if implemented, “Home Illinois” would bring the total funding in that area to $350 million.
“The faces of Illinoisans with no home to go to are not homogenous,” Pritzker said in his budget address. “They include single parents with infants and toddlers, 6th graders trying to complete their homework using toilets as a desk in temporary shared housing, and LGBTQ+ high schoolers who were kicked out of their homes by their parents.”
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March 27, 2023 at 04:46PM