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‘A great step forward,’ Senate’s budget restores proposed affordable housing tax credit program




Photo by Daniel McCullough on Unsplash

In a positive turn of events, the Senate’s version of the two-year operating budget restores a new affordable housing tax credit program that was originally nowhere to be seen in the Senate’s proposed budget.

The program would attract developers to build low-income housing by making state tax credits accessible to projects receiving federal aid. Ohio Gov. Mike DeWine proposed the program by putting it in his budget, but the Senate’s initial proposed budget cut the program altogether — causing an outcry from housing advocates, who called it an “all out assault … on rental housing.”

But DeWine’s version of the affordable housing tax credit program was back in the budget the Senate passed last week.

“With the state housing tax credit it would bring new dollars to the state of Ohio for the production of affordable workforce housing,” said Coalition on Homelessness and Housing in Ohio (COHHIO) executive director Amy Riegel. “This will help build new housing units into communities all across the state that will help drive that economic growth and offer communities new options for housing for their workforce.”

The Senate went with what DeWine originally proposed: capping the amount of credits at $100 million, which would create about 4,000 housing units during the program’s term from July 2 to June 30, 2027, Riegel said.

“Restoring the governor’s introduced program is a great step forward,” she said.

However, the House’s budget proposal had upped the amount of credits to $500 million, which would have created 26,000 housing units, Riegel said.

“That’s a significant difference,” she said. “We hope there may still be room to consider the House’s version of the state housing tax credit knowing just how much of a deficit we have right now in housing across the state and the economic development that is on the horizon.”

Shortage of affordable housing

There is a deficit of about 270,000 affordable and available rental units to the 448,000 extremely low-income households in Ohio — meaning there are only 40 affordable units for every 100 households, according to a March report from COHHIO and the National Low Income Housing Coalition (NLIHC).

“In recent years we’ve seen the number of affordable rental units plummet, which means more families are experiencing longer bouts of homelessness,” Erica Mulryan, Director of the Ohio Balance of State Continuum of Care, said in a news release.

Full-time workers in Ohio need to make at least $19.09 an hour to afford a 2-bedroom apartment in Ohio — a $2.04 increase from last year, according to a new joint report according from the NLIHC and COHHIO.

“When so many jobs pay too little to afford a secure place to live, families are forced to make impossible decisions about whether to pay the rent, buy food, or forego medicine, transportation or education,” Riegel said in a release. “A precarious workforce means tired, stressed, unhealthy employees, higher absenteeism, and lower productivity.”

Nixing the Ohio Housing Finance Agency

The Senate’s version of the budget would transfer the Ohio Housing Finance Agency (OHFA) to the newly created Governor’s Office of Housing Transformation starting in January.

OHFA has a proposed budget of $16.8 million for fiscal year 2024 and $17.4 for fiscal year 2025 — a nearly 8% percent decrease for both years when compared to the House’s version of the budget.

Under the Senate’s budget, all the current employees of OHFA would stay on staff, but the governor would be able to pick the director and appoint all new members.  The number of Tax Credit Authority members would increase from five to seven and the office would have to get the green light from the Tax Credit Authority before approving funding for multifamily rental housing.

The budget would also nix their authority to create pilot programs to increase housing opportunities for “extremely low-income households, pregnant women, and new mothers,” according to an analysis by the nonpartisan Legislative Service Commission.

Affordable Housing Alliance of Central Ohio said it’s crucial OHFA remains independent.

“This was a firewall erected nearly twenty years ago by Republican legislators to keep influence from developers, lobbyists, and other special interests shielded from the funding decisions our local communities rely upon,” AHACO said in a statement.

“The Alliance respectfully requests that this monumental shift in state policy be given the full debate it deserves by removing it from the fast-moving budget and allowing hearings and expert opinions on the ramifications Ohio may suffer.”

State Sen. Kent Smith, D-Euclid, implored his fellow Senators not to make these changes to OHFA during last week’s Senate session.

“It’s the last thing we should be doing,” he said. “Frankly, we don’t need to eliminate OHFA, we need it on steroids to meet the needs of Ohioans.”

He said transferring OHFA to the governor’s office will “add bureaucratic hurdles that will jeopardize Ohio’s economic growth.”

“The Senate’s proposal will put housing that is affordable further out of reach for many Ohioans,” Smith said.

DeWine must sign the budget by June 30.

This story was republished from the Ohio Capital Journal under a Creative Commons license.

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