Assembly Bill 706 has been introduced and moved through the legislative committee process quickly over the last few weeks. While banks utilize a similar program on a federal level often, current language of the proposed bill would make it difficult for banks to work with the state program. WBA is in talks with stakeholders to improve the legislation and have already had two amendments accepted.
This legislation would establish a Wisconsin Low Income Housing Tax Credit program. This program would create a 4% credit as a match to the current Federal 4% tax credit program. The Federal program has been in existence since 1986, and accounts for approximately 90% of all affordable rental housing created in the United States today.
This legislation is modeled on successful state programs that exist in MO, GA, OK and UT among others and leverages the benefit of the Federal Low-Income Housing program. In Wisconsin, we have access to the Federal 9% program and a 4% program. The 9% program is allocated to each state based on population and is fully subscribed—meaning the entire amount is used up on an annual basis because the incentive is significant enough. The 4% credit is underutilized because the incentive is often too low to make it workable for organizations and developers hoping to build low-income housing throughout the State. By creating a state match of 4% to the Federal 4% credit, bringing the total to 8%, the program would align incentives to drive more affordable housing stock to the State.
Currently there is a crisis in our state with 43% of renters in working households unable to find affordable housing. Access to affordable housing helps to attract and keep business in the State and studies have shown having a stable home improves educational outcomes and creates significant health benefits.