There is a pressing need for more affordable housing in Pennsylvania, and state legislators responded this fall by passing a state-level low-income housing tax credit bill with bipartisan support. The Low-Income Housing Tax Credit (LIHTC) is the largest driver of affordable housing development in the Commonwealth.
RHLS has worked with other housing advocates to encourage the passage of this bill. It will create new opportunities to develop affordable housing with the increased availability of tax credits. RHLS represents many leaders in the development of affordable housing and is an expert in using LIHTC to develop much-needed housing for Pennsylvanians.
Executive Director and CEO of the Pennsylvania Housing Finance Agency (PHFA), Robin Wiessmann, commented favorably on the passage of Senate Bill 30 and its signature into law:
“I cannot emphasize enough how much a state tax credit program is needed to deliver affordable housing in Pennsylvania. Whenever we allocate federal tax credits, the demand always far exceeds the supply of tax credits we have available. At a time when a growing number of Pennsylvanians have to spend too much for stable housing, these state tax credits will be greatly appreciated.”
The legislation was written by Senator Tom Killion and received strong bipartisan support in the General Assembly. It will mirror the federal LIHTC program established in 1986, which allocates tax credits to the states. The state housing finance agency then awards them to developers who in turn use them to raise capital for the construction of affordable rental housing.
In exchange for receiving the tax credits, developers agree to keeps rents affordable for a number of years in the apartments that are built. The federal program has been the main vehicle for financially supporting the construction of affordable housing for the last 34 years. The state program will operate in a similar fashion.
The state tax credit will help many affordable housing developers fill gaps in financing that could make or break the success of a development. Housing tax credits encourage private investment in new and existing affordable housing in the state. They help build state and local tax bases, create jobs, and provide affordable housing, and spurs community revitalization. To learn more about LIHTC, click here.