The Wisconsin Low-Income Housing Tax Credit (LIHTC) Program, administered by the Wisconsin Housing and Economic Development Authority (WHEDA), is a crucial initiative designed to expand affordable housing options across the state.
The program addresses housing shortages for low-income households by incentivizing private developers to create and preserve low-income housing in Wisconsin.
From urban hubs like Milwaukee and Madison to smaller cities such as Green Bay and Oshkosh, the program supports developments that ensure housing equity, economic stability, and long-term affordability for Wisconsin residents.
How the Wisconsin LIHTC Program Works
The LIHTC program in Wisconsin works by offering tax credits to developers who create or rehabilitate affordable housing units. These credits reduce the developers’ federal and state tax liabilities, making it financially feasible to build housing that serves households earning 60% or less of the Area Median Income (AMI).
Primary Goals of the LIHTC Program in Wisconsin
- Increase the availability of low-income housing statewide to help people get a safe, decent, and low-cost home.
- Support energy-efficient and sustainable housing developments statewide.
- Address housing shortages in underserved regions like Green Bay and Oshkosh.
- Preserve long-term affordability for at least 30 years.
- Provide housing solutions for seniors, families, and individuals with disabilities.
Key Features of the LIHTC Program in Wisconsin
- Focuses on housing affordability for households earning 60% or less of AMI.
- It supports diverse affordable housing options, such as income-based apartments in Madison, WI, and low-income apartments in Milwaukee, WI.
- Encourages both new construction and rehabilitation projects.
- Requires developments to align with Wisconsin’s Qualified Allocation Plan (QAP).
- Promotes developments near essential services like transit, schools, and healthcare facilities.
Types of Tax Credits Available in Wisconsin
Wisconsin offers two types of LIHTC to developers – 4% and 9%.
9% LIHTC (Competitive)
- Highly competitive and allocated annually.
- It covers a significant portion of project costs, particularly in high-demand areas like Madison and supports initiatives like Madison affordable housing.
4% LIHTC (Non-Competitive)
- Paired with tax-exempt bonds and typically used for large-scale rehabilitation projects or mixed-income developments.
- Frequently applied to projects like low-income apartments in Madison, WI, and affordable housing in Milwaukee, Wisconsin.
Developers often combine LIHTC funding with other state and federal programs to maximize their impact in creating subsidized housing in Wisconsin.
Wisconsin LIHTC Program Application Process
The application process for Wisconsin LIHTC ensures that resources are allocated to projects that align with the state’s housing goals.
- Pre-Application Phase: Developers submit proposals detailing project feasibility, tenant targeting, and financial plans. Projects addressing high-need areas receive priority.
- Proposals must serve households earning 60% or less of AMI.
- Projects like income-restricted apartments in Milwaukee, WI, must demonstrate LIHTC compliance with WHEDA’s QAP.
- Approval and Allocation: High-scoring applications receive tax credits based on a competitive evaluation process.
Wisconsin LIHTC Program Monitoring and Compliance
To guarantee the success and sustainability of LIHTC-funded projects, WHEDA follows strict LIHTC monitoring and compliance requirements:
- Affordability Enforceability: The property should be affordable for at least 30 years.
- Tenant Income Certifications: Annual certification to the effect of a tenant meeting income requirements for LIHTC eligibility to live within Section 8 housing in Milwaukee.
- On-Site Inspections: Regular inspections ensure quality standards in developments such as low-income apartments in Oshkosh.
- Financial Oversight: Developers must provide detailed financial reports to confirm the proper use of tax credits.
The Impact of Wisconsin LIHTC on Communities
The Wisconsin LIHTC Program has had a transformative impact across the state, supporting the development of affordable housing in cities and rural areas alike:
- Affordable Housing Creation: Thousands of units, including low-income apartments in Madison, WI, have been created to address housing shortages.
- Economic Growth: The program generates construction and property management jobs, boosting local economies in areas like Milwaukee and Green Bay.
- Neighborhood Revitalization: Projects like affordable housing in Milwaukee and subsidized housing in Wisconsin help stabilize communities and reduce homelessness.
- Diverse Housing Options: The program supports family units, senior housing, and accessible housing for individuals with disabilities, ensuring that all residents have access to safe, affordable homes.
Wisconsin Cities and Areas Benefiting from LIHTC
The LIHTC Program supports housing developments across Wisconsin, targeting urban centers, mid-sized cities, and rural areas:
- Milwaukee: Projects like Section 8 housing in Milwaukee provide critical relief for families facing rising housing costs.
- Madison: Developments like income-based apartments in Madison, WI, address growing demand in the state capital.
- Green Bay: Initiatives like low-income housing in Green Bay expand access to affordable housing in northeastern Wisconsin.
- Oshkosh: LIHTC-funded properties, including low-income apartments in Oshkosh, ensure housing options for working families.
- Appleton: Projects like low-income housing in Appleton, WI, contribute to housing equity in smaller cities.
Conclusion
The Wisconsin Low-Income Housing Tax Credit Program is a cornerstone of the state’s affordable housing strategy. It ensures that residents of urban and rural areas can access safe, sustainable, and affordable homes.
The program continues to build thriving, equitable communities, from urban hubs like Milwaukee and Madison to smaller cities like Green Bay and Oshkosh. With its focus on long-term affordability and strategic partnerships, the LIHTC program remains vital for creating housing stability in Wisconsin.
