Tax credits help create affordable housing in Oklahoma. Here’s why I’m an advocate.
Jun 9, 2015
Affordable housing is more than a partnership of nonprofit organizations, charities, and government. For many low-income earners and families, homeless individuals, youths transitioning out of foster care, and senior citizens, affordable housing means living in a safe place that can be called home.
In 2014, Oklahoma lawmakers passed the Oklahoma Affordable Housing Act, which created a state version of the federal Low Income Housing Tax Credit program. These tax credits are designed to decrease the cost of construction or rehabilitation of affordable housing, which trickles down to low-income citizens in the form of reduced rents.
I’m part of the recently formed Oklahoma Coalition for Affordable Housing, which advocates for sound policies and programs that foster the creation of new affordable housing. We work with government agencies and developers to add more affordable housing units to the state. In May, the coalition held its kickoff event, and a panel of experts discussed the current housing issues in Oklahoma, and how we can work side by side to address them. The panel consisted of Scott Nixon with Sugar Creek Capital, Patrick Raglow with Catholic Charities, Greg Shinn with the Mental Health Association Oklahoma, Rachel Dorsett with the Oklahoma Department of Human Services, Brent Kisling of the Enid Regional Development Alliance, Lance Windel with LW Development, and myself.
It’s important to understand why Oklahoma needs affordable housing, and how public-private partnerships can help provide a safe home for every Oklahoman in need.
The new demand for affordable housing
Why is affordable housing a need in Oklahoma? Let’s look at the numbers. From 2009 to 2013, household incomes in Oklahoma grew 8.3 percent, but average rents jumped 13.8 percent and home prices rose 14.2 percent over the same four-year span, according to the U.S. Census Bureau.
Over the past few years, Western Oklahoma has experienced serious growth because of an uptick in petroleum extraction and new wind farming construction. This sea of new workers has generated upward movement on the region’s local housing stock, and demand has outstripped supply. As a result, home prices and rents are going up, but incomes are marking time and increasing only slightly month after month. In general, there just isn’t enough new affordable housing construction throughout Oklahoma to meet demand.
Reducing construction costs through tax credits
The new state tax credits supplement similar federal tax credits, and together these two incentives help developers raise capital, which can reduce financing costs and therefore total construction and operating expenses. When developers can build new units or update older units at reduced costs, Oklahoma residents are able to rent them for less than market value. We’ve seen this program work.
Make no mistake: These tax credits have helped create hundreds of new affordable housing units for Oklahomans. The Oklahoma Housing Finance Agency approved funding for 11 housing developments recently, and a handful of those affordable housing developments wouldn’t have been possible without these credits. That’s just the first round of funding too – another round of approvals will be taking place in July, and all of those developments have affordable housing components. Hundreds of affordable housing units that will come to fruition soon wouldn’t have been possible if not for these tax credits.
Though the credits come from state coffers, Oklahoma cities, counties, and communities can assist in reducing affordable housing building costs by waiving construction permit fees or through infrastructure support, like bringing water and electric lines to the site or through street and sidewalk repairs.
What’s next for affordable housing
The Oklahoma Coalition for Affordable Housing will be a steadfast advocate for affordable housing. From a senior citizen on a fixed income to a young adult finally transitioning out of foster care, many of our neighbors have a need for affordable housing in Oklahoma.
By partnering with nonprofit organizations and charities that build affordable housing, and working closely with state and local officials to create sound policies that spur new construction, we can increase the number of housing units for Oklahomans that need an affordable place to call home.
Stay tuned for the Statewide Housing Needs Assessment scheduled for completion December 2015. Integra Realty Resources, in partnership with The University of Oklahoma’s Division of Regional and City Planning in the College of Architecture and DeBruler, Inc., has been contracted to complete the study, which will provide a comprehensive examination of Oklahoma housing data and trends.
