Senate Finance Committee Chair Ron Wyden, D-Ore., along with Sen. Dan Sullivan, R-Alaska, and two bipartisan members of the House Ways and Means Committee have introduced companion bills in both the House and Senate to create a tax credit aimed at development of middle-income rental housing.
Wyden is actively pushing the legislation, even pitching a bipartisan housing bill as part of extenders negotiations, though its inclusion appears unlikely.
Modeled after the Low-Income Housing Tax Credit, the Workforce Housing Tax Credit would cover 50% of the cost of a new construction during the lifetime of the building, or 20% for rehabilitated and bond-financed buildings. Buildings whose units are occupied by individuals with income at 100% or less of the median income for the area in which they reside and rents are maintained at 30% of a designated income. Affordability restrictions would be kept in place for an up-to-30-year period, with a 15-year affordability period required after the initial compliance period as part of an extended commitment.
The credit would be allocated according to state population at an initial $1 per capita rate with a minimum $1.5 million allocation and can be made more generous for projects in areas deemed by the Department of Housing and Urban Development to be “difficult development areas.” However, state agencies would only be able to direct the credit to projects otherwise not seen as viable without the assistance, and the middle-income housing credit could be shifted to Low Income Housing Tax Credits at the state’s discretion or combined with LIHTCs on the same project.
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