New affordable workforce housing credits will change housing landscape for Ohio workers, families: Gail Pavliga

COLUMBUS, Ohio -- The need for affordable workforce housing in Ohio has never been higher. That is why I was proud to champion the affordable workforce housing tax credits in our state budget. The initiative leverages federal funds, incentivizes private sector investment, and encourages economic growth by creating a more affordable and sustainable housing landscape for our workers and their families.

 This has been something that I have supported since the previous General Assembly and was able to get across the finish line when the budget was signed into law by the governor.

 Unfortunately, Ohio and the nation have faced shortages of both workers and affordable housing, impacting impacted families, veterans, and seniors across the state. In 2020, only three out of the ten most common jobs paid enough for a worker to afford a modest two-bedroom apartment. This alarming number burdens not only the lowest-income households but also moderate-income renters, with nearly 400,000 households in Ohio spending over half of their income on rent.

To address this real concern, we pushed to ensure affordable workforce housing relief made its way into this state budget. The legislation recognizes the efficacy of the federal Housing Credit, or “LIHTC,” as a driver of affordable housing development. The tax credit in the budget will offer $100 million in credits for Ohio families and workers.

 The credit builds upon this proven model by offering a 9% or 4% credit, utilizing federal tax-exempt bonds. Ohio currently receives approximately $120 million in federal bond volume cap for multifamily development annually, yet much of this allocation remains untapped due to a lack of incentives for private sector investment since 2015. By aligning the state’s resources with the existing federal program, it creates a more attractive environment for private developers to add much needed housing for Ohio’s workforce.

 Twenty states have successfully enacted state housing tax credits, These states have witnessed increased investments and development, while Ohio has fallen behind. However, by establishing a state-level funding mechanism, we will make Ohio more appealing to private sector investors. The legislation aims to revitalize our housing market, stimulate economic growth, create new opportunities and attract investment for affordable housing units.

 This initiative is entirely performance-based. Developers will only receive tax credits if they actively participate in the incentive program and deliver on their commitment to building new housing units. The state also retains the power to claw back the award if developers fail to fulfill their obligations. This accountability measure ensures tax credits are effectively utilized to address the housing crisis and maximize their positive impact on communities.

 This budget represents a vital solution to Ohio’s growing workforce housing crisis. By leveraging federal funds, increasing investment attractiveness, and establishing a performance-based tax credit system, it promises to generate substantial economic impact, create jobs, and significantly increase the availability of affordable housing for our citizens. We took the chance to seize this opportunity and take decisive action to alleviate the housing burden faced by working families. Focusing on affordable workforce housing will pave the way for a brighter and more prosperous future for all Ohioans.