$26 million in housing tax credits to fund 18 IL housing developments

CHICAGO (KBSI) – A proposed new development of 23 duplexes in Harriburg is one of several affordable housing developments in 12 Illinois counties receiving low income housing tax credits for affordable housing.

Conditional awards totaling nearly $26 million in federal Low-Income Housing Tax Credits (LIHTC) will fund 18 affordable housing developments in 12 counties throughout Illinois.

Once sold to investors, the tax credits will generate an estimated $235 million in private capital to finance the creation and/or preservation of 1,159 affordable units for low- to moderate-income families, seniors, and people with disabilities, according to the Illinois Housing Development Authority.

“Here in the Land of Lincoln, housing isn’t a privilege—it’s a right. And my administration is committed to making sure that every Illinoisan has access to affordable housing, so they can build better lives for themselves and their families,” said Governor JB Pritzker. “That’s why we are dispersing $26 million through Low-Income Housing Tax Credits to build more units, reaching even more families up and down the state with a safe place to call home.”

“Every person in Illinois deserves access to affordable housing, and that is why our state is committed to improving housing opportunities for our vulnerable communities,” said Lt. Gov. Juliana Stratton. “I applaud Governor Pritzker and the Illinois Housing Department Authority’s efforts to strengthen the Low-Income Housing Tax Credit, which will help uplift our communities and prevent the trauma of homelessness across our state.”

Seventy-three percent of extremely low-income renter households in Illinois are severely cost burdened or spend more than half of their income on housing, according to the National Low Income Housing Coalition. A severe shortage of affordable units for extremely low-income families aggravates the problem.

Illinois will need to create and preserve more than 293,354 housing units to close the gap and ensure these households are less burdened and have more security in making their rent payment, according to IHDA.

“All Illinoisans have a right to a safe, decent and affordable place to live and call home and IHDA will continue to utilize every tool at our disposal to deliver equitable access to housing and economic opportunity for the most vulnerable,” said IHDA Executive Director Kristin Faust. “Once constructed, the two developments in Peoria will bring the city to homelessness to functional zero meaning anyone who needs a place to spend the night will have a bed while they obtain the resources for more permanent and stable housing. This is a tremendous milestone in Governor Pritzker’s goal to end homelessness in Illinois.”

The Low-Income Housing Tax Credit program was created in 1986 when Congress passed the Tax Reform Act of 1986 (P.L. 99–514). The Internal Revenue Service allocates a certain number of tax credits annually to each state based on population. IHDA administers the LIHTC program for Illinois and awards the credits to affordable housing developments after a competitive application process.

Once developers receive the credits, they traditionally sell them to investors and use the equity generated from the sale to reduce construction and operating costs, according to IDPH. The savings in underwriting are passed on to the renter in the form of below-market rents, which must remain affordable for a minimum of 30 years.

Since 1987, LIHTC has provided more than $208 billion in equity investment. It has produced nearly 3.5 million affordable rental homes and housed 8 million low-income households, according to data from the National Council of State Housing Agencies and analysis from the National Association of Home Builders. It has also supported the creation of more than 5.5 million jobs, generated more than $617 billion in wages & business income, and spurred more than $214 billion in tax revenue,

“The Low-Income Housing Tax Credit program is one of the best incentives at the federal level for helping develop affordable housing,” said Congressman Darin LaHood (IL-16). “Many of these projects, especially in rural areas, would struggle to find financing without this vital tool. I introduced the Affordable Housing Credit Improvement Act to modernize the Low-Income Housing Tax Credit to help expand our housing supply, strengthen communities, and support economic development in Illinois.”

Introduced in May 2023, the bipartisan Affordable Housing Credit Improvement Act (S. 1557 and H.R. 3238) is a comprehensive piece of housing legislation designed to expand and strengthen the Low-Income Housing Tax Credit. If passed by Congress, the Affordable Housing Credit Improvement Act will lead to nearly 2 million new affordable homes over the next decade and provide IHDA with additional tools to finance the creation of affordable housing across Illinois.

“It is critical we build and preserve more affordable housing throughout Illinois which is why I am proud to cosponsor the Affordable Housing Credit Improvement Act,” said Congressman Brad Schneider (IL-10). “By strengthening the Low-Income Housing Tax Credit, more developments can be built to provide safe and stable housing to for all Illinoisans.”

Some of the awarded projects may be allocated additional funding from the Illinois General Assembly to overcome pandemic related construction cost increases. In June 2022, the Illinois General Assembly appropriated $150 million in State and Local Fiscal Recovery Funds from the American Rescue Plan Act (P.L. 117-2) to the COVID-19 Affordable Housing Grant Program (P.A. 102-0175) administered by IHDA. This grant program was designed by the legislature to provide vital funding for qualified housing developments awarded federal Low-Income Housing Tax Credits to overcome increased costs related to the COVID-19 pandemic.

“Phoenix Manor and Churchview Garden Homes will help combat homelessness in the greater Peoria area, and ensure everyone has a roof over their head,” said Illinois Senate Assistant Majority Leader David Koehler (D-Peoria). “These developments will give our homeless a warm bed while they are looking for their forever home. Congratulations to all involved in helping to curb homelessness in Peoria.”

Since IHDA began administering the LIHTC program it has financed the creation and/or preservation of more than 58,000 units of affordable housing across Illinois. Tap here to read more information regarding the LIHTC program.

“Abrams Intergenerational Village will provide permanent supportive housing for some of our most vulnerable who are in need of a safe place to call home,” said Illinois Senate Assistant Majority Leader Mattie Hunter (D-Chicago). “This investment of state and federal resources will create Chicago’s first intentional affordable housing development for seniors, grand-families and students.”

The IHDA Board approved the a development in Harrisburg to receive 2023 Low-Income Housing Tax Credits:

Timber Trails Apartments (Harrisburg): Budslick Investments, LLC and Affordable Housing of Southern Illinois are proposing a new development consisting of 23 duplexes spread out over eight acres. The duplexes consist of mix of two-, three-bedroom and four three-bedroom family homes with modern, efficient amenities. The design concept is to create a traditional residential neighborhood with an open picnic recreation area and small playground at the center of the development.