OLYMPIA — State lawmakers are considering matching a federal tax credit for owners of low-income housing projects to encourage new development that might not otherwise be economically feasible, spending up to $42 million per year.
The credits are typically used by the owner of the low-income housing project as equity which can be sold off to help make the development solvent. Though federal programs already exists, the most appealing plans are highly competitive, meaning not everyone gets a large piece of the pie. Sponsors of the bill say that House Bill 2913 would help fill funding gaps.
The Housing Authority of Grant County manages 949 units in low-income housing projects spread across the county, and provides more services than most rural housing authorities, said executive director Carol Anderson.
The HAGC maintains not only low-income housing, but also emergency housing to provide short-term relief from homelessness and transitional housing to help the homeless get back on their feet long-term. Agricultural and seasonal workers also often turn to the HAGC for housing.
Tax credits help make it possible for the Housing Authority of Grant County to build new developments, said HAGC executive director Carol Anderson, but extra funding sources tend to be needed to cover the difference.
Mark Sheffle testified recently on behalf of Vantage Capital, an investment firm that has financially backed affordable housing projects with $2 billion over the last 25 years.
“This (bill) will result in more investment dollars in your state, which will result in more facilitation and more building of these affordable units,” Sheffle said.
Also testifying in support of the bill was Kim Herman, the executive director of the Washington State Housing Finance Commission, the state agency that would manage the new tax credit. In Colorado, Herman said, a similar program was so successful over five years that the program managers are looking to extend it. If enacted in Washington, Herman said, it could result in three to five more affordable housing projects being built every year.
Sheffle, who once served in the Colorado state legislature, pointed to projects in that state that only came about because of Colorado’s tax credits, such as a 49-unit senior housing facility and a 78-unit facility that serves homeless and near-homeless veterans.
“These are the projects on the bubble where (this bill) makes the difference, where you’re drawing down the federal dollars, and if you can add to that you can really extend your ability to develop,” Sheffle said.