Last week, Senator Cantwell announced a national campaign to expand funding for the federal Low Income Housing Tax Credit (LIHTC) program. The proposed 50% increase would finance an estimated 35,000 affordable units in Washington State over the next decade, around 4,200 more units than would be possible under the status quo.
The LIHTC program is divided between noncompetitive “4%” tax credits and competitive “9%” tax credits. Both have the same funding mechanism, though the competitive “9%” level provides double the equity for housing projects, thus making it more feasible to serve households with incomes below 50% AMI, where Snohomish County’s greatest need is concentrated. The proposed increases would apply to the competitive program, and are sorely needed. Senator Cantwell’s office has also prepared a report on why this increase is needed, including an overview of what changes are being proposed.
We are now more than midway through the 2016 Legislative Session, and there are a few important housing issues making progress.
First, the bill that would establish an additional option for a multifamily tax exemption (MFTE) for housing preservation has passed the Senate! This option would not change the existing MFTE option for new construction, but would add a second tool that would work in a similar fashion. In this case, owners of existing housing would receive a property tax exemption in exchange for keeping a portion of their units at affordable rent levels. While jurisdictions can go further in their own application as desired, the legislation would require a minimum of 25% of units preserved at rent levels affordable to households earning no more than 50% area median income. (Those considered “very low income” and lower) The property must meet all code requirements at time of application (and on an ongoing basis), with a three year grace period for properties to be rehabilitated. Its companion bill, HB 2544, has gone on to the House.
Updates on this session’s other potential housing legislation, including the Housing Trust Fund, prohibiting source of income discrimination, tenant screening reforms, and more can be found on the Washington Low Income Housing Alliance Blog.