Millions given in tax credits for affordable housing

Angela Hunter

The Times Weekly Web

Governor JB Pritzker and the Illinois Housing Development Authority (IHDA) Board issue a state that conditional awards totaling nearly $34 million in federal Low-Income Housing Tax Credits from (LIHTC) will fund 25 affordable housing developments in 15 counties across Illinois., According to the Gov. the tax credits will generate an estimated $296 million in private capital to finance the creation and/or preservation of 1,343 affordable units for low- to moderate-income families, seniors, veterans, and persons with special needs.

“All Illinoisans—no matter their income status, age, occupation, zip code, or ability—deserve access to affordable housing,” said Governor JB Pritzker. “These tax credits for affordable housing developments help us get to a place where no Illinoisan goes without a roof over their head. I am proud of our state for leading the nation in supporting our most vulnerable residents.”

The Low-Income Housing Tax Credit program comes from the passage of the Tax Reform Act of 1986 (P.L. 99-514). The Internal Revenue Service allocates a certain number of tax credits annually to each state based on population. IHDA administers the LIHTC program on behalf of the state of Illinois and awards the credits after a competitive application process. Once developers receive the credits, they traditionally sell them to investors and use the equity generated from the sale to reduce construction and operating costs. These savings in underwriting are passed on to the renter in the form of below-market rents, which must remain affordable for a minimum of 30 years.

“The Low-Income Housing Tax Credit program is a public-private partnership that is the primary driver for the creation of affordable housing throughout the nation,” said IHDA Executive Director Kristin Faust. “All Illinoisans have a right to a safe, decent and affordable place to live and IHDA will continue to utilize every tool at our disposal to deliver equitable access to housing and economic opportunity for the most vulnerable.

According to the National Low Income Housing Coalition, 71% of extremely low-income renter households are severely cost burdened or spend more than half of their income on housing. This problem is aggravated due to a severe shortage of affordable units for extremely low-income families. Illinois will need to create and preserve over 288,000 housing units to close the gap and ensure these households are less burdened and have more security in making their rent payment.

Some of the awarded projects may be allocated additional funding from the Illinois General Assembly to overcome pandemic related construction cost increases. In June 2021, the Illinois General Assembly appropriated $75 million in State and Local Fiscal Recovery Funds from the American Rescue Plan Act (P.L. 117-2) to the COVID-19 Affordable Housing Grant Program (P.A. 102-0175) administered by IHDA. This grant program was designed by the legislature to provide vital funding for qualified housing developments awarded federal Low-Income Housing Tax Credits to overcome increased costs related to the COVID-19 pandemic.

“As Chairperson of the Housing Committee, we are committed to addressing housing needs and disparities to assist our underserved communities and vulnerable residents,” said State Representative Will Guzzardi (D-Chicago).