A successful model for harnessing private capital
The state housing tax credit legislation is modeled on the highly successful federal low- income housing tax credit (LIHTC) program, which is responsible for approximately 90% of affordable rental housing construction and renovations in the country. Here in Pennsylvania, LIHTC is oversubscribed (three applications are received for every one that can be funded). That means:
- The federal model is working in Pennsylvania; and
- There is private capital currently available that can be, but is not currently, harnessed for the creation of affordable housing opportunities.
Combining the federal and state programs creates efficiencies by aligning these limited resources. Approximately a third of the 50 states have enacted a state housing tax credit.
Decent, safe and stable housing
A state tax credit will support the creation and preservation of affordable housing for families unable to afford decent housing and those who are cost burdened. At least 10% of the tax credits will provide housing units targeting households with incomes at or below 30% of area median income.
Construction & renovation of affordable housing benefits our economy
Affordable housing leads directly to new economic activity and growth in tax revenues.
Investment in affordable housing construction and renovation supports salaries and wages for workers in multiple industries, including local construction workers and tradespersons, and towards the procurement of local goods and services. This spending recirculates within the state economy, supporting additional business activity and employment throughout the state.
In Pennsylvania, for every $10 million in affordable housing construction, it will generate $19.6 million in total economic impact and support 110 jobs. With an economic multiplier effect of nearly 2 and the jobs supported, the impact of building and renovating affordable housing is important to the Pennsylvania economy. These one-time economic impacts are one part of the many benefits generated by the creation and preservation of affordable housing.
Once built, affordable housing and its preservation imparts ongoing economic impacts within the state and for its residents. New and well-maintained housing can stabilize and strengthen local real estate markets, benefit local businesses, and provide stable housing for the local labor force.
Economic impact of $10 million for new construction and renovation of existing affordable housing in Pennsylvania
Support Pennsylvania Senate Bill 30 today to provide more resources through a State Housing Tax Credit to build and preserve affordable housing for low-income Pennsylvania families.