Blogs| Ohio Low-Income Housing Tax Credit (LIHTC) Program
Written by
Priya Gupta
Published
Nov 11, 2024
Topics
State LIHTC
The Ohio Low-Income Housing Tax Credit program is a major state initiative targeting low-income families in Ohio in the expansion of affordable housing. The program utilizes annual state tax credits of $100 million, leveraging that money to attract private funds to finance affordable housing in all parts of the state, from city centers to rural communities. It was developed to fight the major challenges in housing affordability and not only helps ease the cost for residents but also brings about substantial economic benefits toward job growth and community stability statewide.
The Ohio Low-Income Housing Tax Credit (LIHTC) Program is Ohio’s primary tool for creating and preserving affordable housing for low-income households. Structured along the lines of the federal LIHTC, Ohio’s program has an annual allocation of up to $100 million and uses private investment to finance affordable housing development. It was established based on the pressing need for Ohio to address affordable housing deficits, especially concerning the housing challenges faced by lower-income and cost-burdened households.
Administered by OHFA, this program is paramount in Ohio’s housing policy with strong economic impact.
|
Ohio |
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| Program | Ohio Low-Income Housing Tax Credit |
| Administering Agency | Ohio Housing Finance Agency |
| Enacting Legislation | H.B. 33 |
| Annual State Cap | $100 million |
| Transaction Cap | Federal LIHTC allocation |
| Credit Description | State credit equal to the federal LIHTC; the combined credits don’t exceed the amount necessary to ensure financial feasibility. |
| Credit Period (Compliance) | 10 years |
| Applicable for | Available for properties placed in service on or after July 1, 2023, and for which credits are reserved before July 1, 2027. |
Ohio’s LIHTC program has a profound economic and housing impact. Since its launch, the program has invested more than 133,501 affordable housing units in stabilizing the housing of thousands of low-income residents all over the state. In addition to housing, the program has helped more than 206,704 jobs and added $23.35 billion in wages and business income in Ohio, as new data from the ACTION Campaign shows.
The significance of the program is further emphasized by the tax revenue generated by it; more than $8 billion in state and local tax revenue has been generated by the Ohio LIHTC program. The figures depict the economic as well as social benefits of the Ohio LIHTC program, making it a bedrock component of both the affordable housing sector and more general economic policy in the state.
The Ohio LIHTC program directly addresses the challenges the state faces in affordable housing. Of all renting households in Ohio, one-third, or 367,928 renter households, are “cost-burdened” because their monthly rent takes up over half of their monthly income.
The LIHTC program was created to provide relief to such households with more affordable rental choices. This also tries to ease the burden of the minimum-wage earner, who, at present wage levels, will need to work 58 hours a week to pay for a one-bedroom apartment at fair market rent in Ohio .
Affordable housing opportunities created by the program do not lead to displacement and ensure that essential workers, seniors, and other vulnerable populations can have a safe place to live.
The Ohio LIHTC program structure was created to work with federal tax credits, thus potentially allowing developers to gain both state and federal credits. There are two different types of credits: 4% for rehabilitation and new construction and 9% for new developments. Credits are awarded based on OHFA’s Qualified Allocation Plan, which outlines particular criteria for prioritizing developments in high-need areas and provides equitable distribution across Ohio. For instance, the projects that come under minimum income and rent restrictions have to be consistent with the guidelines of the OHFA, which entails sustainable development practices and community integration.
The significant characteristic of the state of Ohio LIHTC is that it is not refundable but can be carried forward for five years to provide developers with some choice of financing their projects. Another characteristic is that the credit allocation is maintained under strict scrutiny; hence, OHFA requires periodic reporting to be on track and observe the affordability requirement.
The success of developments that meet the needs of Ohioans, from both urban and rural, can best be appreciated by seeing the impact Ohio’s LIHTC program has had. From the high-rise, multi-family units in Columbus and Cleveland to the smaller, single-family homes in rural Ohio, the diversity of LIHTC-funded projects has only just begun to be appreciated.
In a bid to provide diversity in the types of housing, the program is accommodating low-income housing needs catered to by families, the elderly, and persons with disabilities all over the state. At the same time, construction jobs and boosting local businesses provide for local economic development. Thus, Ohio communities enjoy affordable housing in addition to improved economic stability and prosperity.
It was in 2023 that Ohio made some significant legislative changes to its LIHTC program under House Bill 33, allocating a $100 million annual LIHTC through 2027 and implementing the Governor’s Office of Housing Transformation to make more efficient administration. This main office is set to synchronize the efforts of the several state departments in dealing more effectively with housing issues.
The Single-Family Housing Credit Program was also established, with annual allocations of $50 million to assist Ohioans who are low-to-moderate income homebuyers. This program helps to build long-term stable housing.
These changes by the legislation reflect Ohio’s commitment to the expansion of choice in housing, to keeping up with the growing demand for housing, and to responding to the needs of workforce housing as the state continues to attract major employers and see population growth.
In recent times, this Ohio Low-Income Housing Tax Credit program has become essential to Ohio’s housing plan. It has helped thousands of Ohioans ease housing cost burdens while catalyzing economic activities and job development by encouraging private-sector engagement.
As Ohio’s housing demand continues to rise, the LIHTC program will remain pivotal in ensuring affordable housing is accessible, sustainable, and strategically integrated into communities across the state. The program exemplifies a successful partnership between government and private investment, addressing both housing security and economic resilience for Ohio’s future.
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