State, feds can’t meet increasing demand for housing credits

Developers continue to request more in housing tax credits, but the State of Wisconsin and federal government doesn’t have enough to go around.

Each year, applicants request funding to build affordable rental housing for families, seniors and workers. For this year’s cycle, applicants sought $29.6 million in a federal nine-percent tax credit with the goal to build 1,671 units for low- to moderate-income renters. Another $16.2 million in four-percent housing credits was requested from the State. These dollars would go toward 1,542 units. Eleven of the proposed federal projects could qualify under the rural program, as well as five of the 20 state projects.

This equates to nearly $46 million in requests. However, there is only $31.9 million available.

In 2020, developers requested $61 million in credits but the amount available is the same as this year.

According to the Wisconsin Housing and Economic Development Authority, the demand indicates a shortage of affordable housing throughout the state.

The program does not subsidize renters but instead provides tax incentives to builders to encourage them to create affordable housing. In exchange for receiving credits, developers agree to provide some or all of their units for low- and moderate-income renters. These units must be available for at least 30 years. Any remaining units are rented out at market rates.