State tax credit a bipartisan approach to easing Illinois’ affordable housing deficit

All around Illinois, the signs of change are apparent. The COVID-19 pandemic changed our economy, how we live and work and how working-class and lower-income families struggle day-to-day.

We come together to argue for a solution to one of our state’s most pressing needs to address this change head on: affordable housing. This is not a regional problem, or one of partisan politics. We all know someone who needs help finding a home to call their own, without bankrupting them.

Illinois is far from alone, as our nation grapples with a tenacious housing crisis. As the Illinois Housing Council shared in a report last fall, our state has the eighth-highest deficit of homes nationally, and our housing deficit has grown 64% just in the past decade.

Without affordable housing, Illinois cannot grow its population or attract new businesses. Our families cannot build wealth and save for a better future. Residents travel farther for jobs, for education, for basic services. Stress grows in our economy, our environment, and on every form of public service.

We are coming together as a Democrat and Republican in the Illinois House for a better path forward. The Build Illinois Homes Tax Credit would build on our state’s most successful production tool – the federal Low-Income Housing Tax Credit – to attract private investment for shovel ready affordable housing developments that cannot move forward due to financing gaps.

As envisioned under House Bill 2044, Illinois can take a major step toward addressing its affordable housing shortage by mirroring that successful federal tax credit program with a state credit that more than 20 other states already have adopted.

“We urge our colleagues in Springfield to embrace our changing post-pandemic world and make a commitment to affordable, accessible, quality housing throughout our great state. Support the Build Illinois Homes Tax Credit.”

—  State Reps. Dagmara Avelar and Ryan Spain

The Build Illinois Homes State Tax Credit calls for creating an estimated 3,500 homes or apartments each year, generating nearly $1 billion in economic activity and $300 million in state and local taxes paid over the next decade, and more than 17,000 jobs supported during that time. Each annual round of tax credits will cost the state $350 million spread over 10 years, but the economic returns generated from the program will more than offset the cost.

If the Legislature and governor approve the tax credit as part of next year’s state budget, Illinoisans will pay nothing to support it for several years unlike most state grant programs. Developers receiving the credit use its promise to finance their project fully upfront, and then must complete construction that meets state guidelines and must have qualified tenants move in before investors can collect a single dollar in credits. Unlike grant dollars, any investor found not to be following the credit’s rules must pay back tax dollars they receive.

We stepped up in the Legislature during the pandemic to invest $225 million in federal dollars to ensure affordable housing developments could move forward because of funding shortfalls caused by rising interest rates, inflation on construction costs or other financing challenges. But those funds are running out, and our long-term needs are growing. If we do not act now, Illinois will see a drop in the production of desperately needed affordable homes and apartments.

Workers relocating to our suburbs for warehouse and logistics jobs need affordable housing for our economic success. Seniors and working families on smaller incomes in our cities, suburbs, and rural areas need affordable housing to stabilize their lives. Our neighbors struggling with homelessness need access to safe and stable housing coupled with services. We know the will to create more affordable housing is strong, and we believe the Build Illinois Homes Tax Credit is the way.

We urge our colleagues in Springfield to embrace our changing post-pandemic world and make a commitment to affordable, accessible, quality housing throughout our great state. Support the Build Illinois Homes Tax Credit.

• State Rep. Dagmara “Dee” Avelar, D-Bolingbrook, represents the 85th District. State Rep. Ryan Spain, R-Peoria, serves the 73rd District and is deputy Republican leader.