Georgia Senate advances bill to sunset affordable housing tax credits

"The Peach State's Senate passed a bill Thursday that would cut state-issued low-income housing tax credits by 50% next year and eliminate them in five years. The bill's sponsors would use the cuts as an offset to push through lower personal and corporate tax rates. Lowering the tax credit next year would put owners of tax-credit subsidized low-income properties at high risk of foreclosure."

"Those owner-developers say the risk would cause a cascading national effect. [If] I get barred in Georgia, then I can't do business in the other 49 states, Ken Blankenship, president of the Georgia Affordable Housing Coalition, told The Builder's Daily. If the bill becomes law, developers will lose a key capital stack financing mechanism, potentially limiting affordable housing production amid an estimated shortfall of more than 200,000 units."

Several states have passed laws aimed at housing affordability, and more measures are advancing ahead of the November midterms. Georgia's Senate passed a bill to cut state-issued low-income housing tax credits by 50% next year and eliminate them in five years. Sponsors plan to use the reduced credits to offset lower personal and corporate tax rates. Developers warn that an immediate cut would place owners of tax-credit subsidized properties at high risk of foreclosure and create cascading national effects. Developers would lose a financing mechanism, potentially constraining affordable housing production amid an estimated shortfall exceeding 200,000 units. Georgia's state credit, created in 2001, matches the federal LIHTC and serves as the only state source for building and preserving affordable housing in Georgia.

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