PEORIA (25News Now) – State lawmakers are making another attempt to create a state tax credit that would increase the production of affordable housing.

The Build Illinois Homes Tax Credit is a model of the federal low-income housing tax credit. The Illinois Housing Council says while federal credit is an essential tool used to develop and preserve affordable rental housing throughout the country, it never covers the entire cost of finishing a development project.

The housing council’s executive director, Allison Clement, says the tax credit would help developers cross that finish line.

“It helps to reduce the amount of mortgage debt that the development needs to take on so that they can set rents at an affordable level over the long term,” Clement said. “It costs the same to develop market-rate housing as it does affordable housing, so we need something to subsidize the difference to keep those rents at an affordable level.”

Illinois has the ninth-highest housing deficit in the country, with a shortage of 293,000 affordable rental homes for low-income families, according to the Illinois Housing Council.

The House bill, supported by Rep. Dagmara Avelar (D), asks for a $20 million investment annually for six years that developers can apply for a long-term payment solution.

“Grants are a band-aid solution, very much needed, but they help us in the short term, and we need long-term solutions,” Avelar said.

Bloomington-Normal is one Central Illinois location feeling this deficit. As job growth continues in the Twin Cities, there’s not enough affordable housing to keep up with the expansion.

“We currently have about 90 detached homes on the market, that’s a historic low. We probably need closer to 300 more,” said Bloomington’s City Manager-designate Jeff Jurgens.

The Illinois Housing Council is aware of the crisis after a partner had tried for six years to develop a 50-unit apartment complex but had to pull their request to the state because of funding issues.

“They’re not able to cover that financing gap, so this state tax credit could help get that type of development across the finish line and benefit the community,” Clements said.

Clements argues this model works in 25 other states, creating high-quality affordable homes. Avelar adds if passed, it will generate over 1,000 affordable homes, more than 7,000 jobs, and $650 million in economic benefits.

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