Clark County may see more affordable housing than expected this year thanks to a bipartisan federal tax package and changes to the Low Income Housing Tax Credit program proposed by Sen. Maria Cantwell.
The Low Income Housing Tax Credit program is a major source of funding for affordable housing projects across the nation. But even with a boost, the county needs to produce thousands more units a year to keep up with need.
Still, Victor Caesar, chief real estate officer at Vancouver Housing Authority, said the changes to the program might allow the housing authority to double its current production of housing development.
“VHA is very excited and optimistic about this new legislation passing,” Caesar said in an email. “VHA has a pipeline of projects, a majority of which utilize Low Income Housing Tax Credits. If passed, VHA could expedite the production of housing throughout Clark County.”
The changes lower the requirement for bond funding from 50 percent of a project to 30 percent, for developers to receive the tax credit. This will allow Washington to build nearly twice as many units as expected, according to the Washington State Housing Finance Commission.
“If we’re not increasing the capacity, we’re not really going to get more built. And so this has been, if you will, kind of a governor on the amount of supply that we’ve needed to build,” Sen. Cantwell, D-Wash., said in an interview Tuesday.
It’s the biggest investment in housing in 35 years, according to Cantwell, and will produce 1,700 units of affordable housing across Washington in 2024.
But Clark County alone needs more than 2,500 units a year to keep up with the state’s projected need. Average apartment rents have increased about 35 percent in the last five years within the county, contributing to a surge in evictions.
Advocates of affordable housing say rent increases combined with a lack of inventory is causing more people to become homeless in Clark County. Between 2019 and 2022, the number of people experiencing homelessness in the county increased by 47 percent, according to Council for the Homeless.
Cantwell said the additional funding is greatly needed to start filling in the gap. Washington needs to build about 32,000 affordable units a year, according to the state’s projected housing needs.
The Low Income Housing Tax Credit program has paid for 90 percent of federally funded affordable housing construction across the country since 1986, financing more than 100,000 affordable units in Washington.
Nationwide, the program’s changes will provide more than 200,000 new units over the next two years. Washington will see more than 6,000 additional units.
“This supply catch-up will help working families in both urban and rural areas across the country,” Cantwell said in a news release.
The tax package was a bipartisan effort, Cantwell said, and she hopes to get more funding available for affordable housing next year, but it’s difficult in a contentious legislative environment.
“We got key provisions of the bill, and now we want to go back and fight the rest of this year and next year, really next year, to get the rest of the bill, which would increase the tax incentive even more,” she said.
Senate Finance Chairman Sen. Ron Wyden and House Ways and Means Chairman Rep. Jason Smith unveiled the roughly $78 billion tax deal Tuesday. Wyden, D-Ore., and Smith, R-Mo., aim to pass the tax package before Jan. 29 to avoid disruptions to filing season, according to CQ-Roll Call.
