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MO Workforce Housing Association Addresses Tax Credit Review Commission

December 17, 2012 / by / 0 Comment

Staff Reports

JEFFERSON CITY MO – In the wake of the final report of Governor Nixon’s Tax Credit Review Commission, the Missouri Workforce Housing Association (MOWHA) is pressing their case to see that current successful tax credit programs are maintained. “We thank the TCRC for their work, but not all TCRC members acknowledge the value of certain tax credits. LIHTCs for instance save local governments millions of dollars by reducing homelessness and ensuring that vulnerable seniors and struggling families have a safe place to live”, said Jeff Smith, MOWHA Executive Director.

MOWHA is a statewide organization of community organizations, public agencies, contractors, private and nonprofit developers, construction material suppliers, and other professionals totaling 135 groups in all. Referencing the TCRC, MOWHA Board Chair Kimberly McKinney said, “We hope to find common ground with other parties to reform the LIHTC program by increasing its efficiency to ensure that taxpayers get the most bang for their tax buck. This is the focus of our conversations with policymakers.”

In a statement MOWHA pressed the commission to remember the needed role that the low-income housing tax credit program has played in state growth and the fact that it has grown more slowly than other programs – such as K-12 education – over the past 20 years. In their statement the MOWHA asserts that approximately 30% of all LIHTCs awarded are never redeemed – largely due to projects that never come to fruition – so the actual amount of LIHTCs redeemed most years is closer to $130M.

They also referenced the tightening access to credit and the shortage of new multifamily units, when the demand for rentals is increasing meaning rents could rise sharply. Further, the long-term increase in the number of severely cost-burdened renters (those paying 50% of their income for rent) shows no sign of reversing in the current economic climate.

According to the state Department of Economic Development, the state LIHTC reduces rents by an average of $288 month for elderly and disabled people. Homeless children are less likely to complete high school and more likely to cost the state money throughout their lives instead of contributing as taxpayers. Given the difficulty of educating homeless children, affordable apartments help struggling families provide stability for children. Also, the new requirement that some LIHTCs be set aside for housing people with disabilities is another way credits save money in the long term.“Supportive services provided in specialized housing for people with disabilities save millions for both the state and local governments, as a wide array of mental health and other services are now provided in-house”, said Smith.