Illinois Housing Council Pushes to Extend, Expand Affordable Housing Tax Credit Amid Statewide Shortage (Chicago, IL) – With Illinois facing a shortage of nearly 300,000 affordable rental homes for its lowest-income residents, the Illinois Housing Council (IHC) is urging lawmakers to act on legislation aimed at preserving and expanding a key housing incentive program.

The group is backing House Bill 4413 and Senate Bill 3738, sponsored by State Rep. Dagmara Avelar and State Sen. Mike Porfirio, which would extend and enhance the Illinois Affordable Housing Tax Credit (IAHTC). The bipartisan program, in place for more than 20 years, has been credited with helping create and preserve tens of thousands of affordable housing units across the state.

Housing advocates say a mix of rising construction costs, elevated interest rates and limited public funding has made it increasingly difficult to complete affordable housing developments—even when federal assistance is available.

The IAHTC helps close that gap by incentivizing private contributions. Donors who provide cash, land or buildings to nonprofit developers receive a state tax credit equal to 50% of the donation’s value, making projects more financially viable.

Since its inception, the program has generated more than $510 million in private donations, supporting housing developments in urban, suburban and rural communities throughout Illinois. These projects include new construction as well as rehabilitation and preservation efforts.

“This program works because it turns private investment into real housing outcomes,” said Allison Clements, executive director of the Illinois Housing Council. “The IAHTC is not an abstract policy tool; it produces homes, stabilizes neighborhoods, and strengthens local economies.”

The proposed legislation would extend the tax credit program for another decade, providing long-term certainty for developers and investors. It would also increase the program’s annual growth rate from 5% to 10%, a change supporters say would significantly boost its impact while maintaining relatively low costs to the state.

Advocates warn that allowing the program to expire at the end of 2026 could stall projects currently in development and slow preservation efforts, particularly in rural and smaller communities with fewer financing options.

They also point to potential financial losses. If the credit lapses, Illinois could forgo an estimated $40 million in donation tax credits, resulting in the loss of about $80 million in private donations and related fees. Additionally, the state risks losing at least $15 million annually in leveraged private capital tied to the program.

With housing affordability remaining a central issue for policymakers, the Illinois Housing Council is calling on legislators to move forward with the bills and reinforce what it describes as one of the state’s most effective housing tools.

Illinois Housing Council Pushes to Extend, Expand Affordable Housing Tax Credit Amid Statewide Shortage