HousingWireHousingWire
Two Republican members of the Wisconsin Legislature are seeking to expand the scope of the state’s low-income housing tax credit (LIHTC) program while also aiming to target more than one-third of its credits to the state’s rural areas. This is according to reporting at WisBusiness.
The state-based LIHTC program, administered by the Wisconsin Housing and Economic Development Authority (WHEDA), authorizes up to $42 million per year in income tax credits. The credits go to “owners and investors that develop or rehabilitate low-to-moderate-income housing,” the reporting explained.
The new bill seeks to increase that total to $100 million, but under the condition that at least 35% of the allocated credits every year go to rural parts of the state.
The program was first established in 2018. Since then, it has issued credits to 71 projects — 40 of which are complete while 31 remain under development, according to a memo about the new effort.
The bill’s co-sponsors, Rep. David Armstrong and Sen. Romaine Quinn, explained their reasoning for the proposal in the memo. They said their interests are centered on meeting the needs of Wisconsin businesses.
“As many of you are aware, Wisconsin is in the middle of a housing crisis — there simply isn’t enough affordable housing to meet the needs of working-age residents,” Armstrong and Quinn wrote. “This in turn hurts, among other things, the ability of Wisconsin employers to recruit employees.”
The LIHTC, they added, is a tool that can potentially help relieve this issue, especially if the eligibility requirements are expanded.
The proposal “would help the housing issue by expanding the LIHTC program to up to $100 million in tax credits in any given year, which could provide assistance to more development and rehabilitation projects.” It would “further [expand] eligibility by eliminating the current requirement that projects be financed with tax-exempt bonds. [The bill] also allows insurers that participate in certain business organizations to claim the credit.”
Regarding the provision for rural areas, this “carve-out would be in addition to the current requirement that WHEDA give preference to projects in communities with populations of fewer than 150,000,” the lawmakers said. “The carve-out would not apply in years where WHEDA doesn’t receive enough applications for rural projects to meet the 35% threshold.”
The lawmakers also described a mismatch between supply and demand for the credits.
“Going into the 2025 cycle, WHEDA has already received applications for projects asking for $20 million in housing tax credits, but current limitations mean that WHEDA has only $7 million in new state housing credits to grant annually,” they said. “Clearly, there’s a demand that’s going unmet.”
They request other lawmakers to signal an intent to sponsor the measure by Feb. 17.
Like much of the rest of the country, Wisconsin is experiencing a housing shortage. Compounding the issue in its largest city is recently identified waste at the Housing Authority of the City of Milwaukee (HACM), where a new chief financial officer identified as much as $2.8 million in misappropriated federal funds that he said were used inappropriately by his predecessors.
The funds were reportedly tied to the U.S. Department of Housing and Urban Development (HUD)’s Housing Choice Voucher (HCV) program for rental assistance, widely referred to as “Section 8” vouchers. The CFO’s investigation has led to an interagency recovery plan between HACM and HUD.
