Cantwell, DelBene push big increase in affordable housing tax credits

By:  David Gutman (The Seattle Times)
Source: The Columbian

A bipartisan bill from two Washington members of Congress would increase funding for low-income housing tax credits by 50 percent, enabling the development of nearly 10,000 new affordable housing units in Washington over the next 10 years.

The bill, sponsored by Sen. Maria Cantwell and Rep. Suzan DelBene, would boost funding of the federal Low Income Housing Tax Credit, a federal program that spends nearly $10 billion a year to drive down the cost of building affordable housing in every state in the country.

The tax credit is the federal government’s chief program to encourage more affordable housing, available to developers to build or rehabilitate units. The tax credit generally offsets about 70 percent of the cost of new projects, and about 30 percent of refurbished housing, according to the Congressional Research Service.

Since it went into law in 1987, the tax credit has helped build more than 270 affordable housing complexes in Seattle with nearly 23,000 units. It’s helped build affordable housing in 37 of Washington’s 39 counties. It helps fund 90 percent of the affordable housing being built in the country.

“The credit is our most important and best tool for affordable housing,” said Kim Herman, executive director of the Washington State Housing Finance Commission, which distributes the tax credits statewide. “It puts literally billions of dollars of private money to work for the public good.”

But, with the Seattle region in the throes of an ongoing housing and homelessness emergency, its been not nearly enough.

Cantwell and DelBene, both Democrats, have Republican co-sponsors for their respective Senate and House versions of the bill. They are seeking a significant funding increase, after winning a 12.5 percent funding increase in last year’s budget deal.

“Unless we increase the amount of credit available federally, we are not going to be solving this problem no matter how hard our local communities work,” Cantwell said Thursday. “We desperately need to increase supply. I can’t say that enough. We desperately need to increase supply.”

Flanked with mayors from the Puget Sound region, she spoke at Plymouth on First, a facility that opened in 2017 and has 80 furnished studio apartments for people dealing with long-term homelessness and medical challenges. The facility was funded by the Seattle housing levy, King County and private donations, but its largest source of funding was the federal housing tax credit.

It is one of 15 affordable housing complexes run or being built by Plymouth Housing, a Seattle nonprofit.