SPRINGFIELD, Ill. - If you're struggling to keep up with your mortgage or rent, you're not alone. State data shows around 375,000 families in Illinois spend more than half of their monthly income on rent. That's something state lawmakers hope to change by creating a new state tax credit for affordable housing.
Rep. Delia Ramirez (D-Chicago) pushed for this plan before the stay-at-home order went into place last year. However, Ramirez says it's needed even more now as Illinois slowly recovers from the COVID-19 pandemic.
The Build Illinois Homes tax credit would utilize $35 million annually over 10 years to help create private investment and give families hope for housing.
The National Low Income Housing Coalition says Illinois needs nearly 260,000 more affordable and available rental homes for people in need. Twenty states have housing tax credits that attract private investment for affordable housing. As a result, Ramirez feels Illinois families should have the same opportunity.
She told the House Revenue Committee Thursday that her plan wouldn't impact the state's budget for one to two years. She stressed the credit can't be claimed by investors until after housing projects are finished.
"Passing the bill now will allow us to get the work going," Ramirez said. "It will allow for the organizations and the developers to begin to apply for this tax credit. Then, by the time that we've built this affordable housing that we all know that we desperately need, we'll be in a different position."
The proposal already has significant bipartisan support and Ramirez hopes it could help build 3,500 homes or apartments each year. Experts from the Illinois Housing Council say it could generate over $1 billion in revenue during the 10 year period.
The Federal Low Income Housing tax credit already helps fund projects in Illinois. Still, application costs for building new homes usually exceed the funds the state has available to match the investments.
Sponsors say the Build Illinois Homes tax credit could help the state match those federal funds currently left out of projects. In fact, there's $262.5 million in private equity that's unused in federal tax credits.
"If we have these additional credits coming from the state of Illinois, we would be able to use more of the federal credits, close those gaps, and truly provide affordable rents to the people of Illinois," said Guacolda Reyes, Chief Real Estate Development Officer for The Resurrection Project in Chicago.
Rep. Tom Demmer (R-Dixon) is a Chief Co-Sponsor of the measure. He explained the state tax credit could create affordable homes, jobs, and new investments.
"This is a great way of building stronger communities, ensuring that housing is available," Demmer said. "But also safe, affordable, reliable housing is available in the communities where people need this all across the state."
"Huge benefits for our state"
The Illinois Housing Council says this plan could bring in over $294.5 million in state and local taxes. Executive Director Allison Clements explained the tax credit could also support 17,250 construction jobs.
"This type of program will result in huge benefits for our state, including stimulation of quality rental housing, the creation of construction jobs, a reduction in cost burden for renters, and an infusion of private capital throughout Illinois," Clements said.
This legislation still needs approval from the Revenue Committee before it can move to the House floor for debate.