Wyden touts tax credits | The Weekly Source
ORegon Senator Ron Wyden visited the Azimuth 315 apartment complex on the west side of Bend on September 30 to advocate for low-income housing tax credits and clean energy tax credits – which reduces the amount owed in federal income taxes – in order to provide affordable housing. The median Bend home is over $700,000, about $200,000 more than the median home sale in Oregon.
Azimuth apartments are funded by low-income housing tax credits, and applications are only open to people earning 60% or less of the area’s median income — in Bend, that’s around $34,000 for a single person, $39,000 for two people and $48,000 for a family. of four. As of December 2021, only 20% of households in Bend could afford the median price of a home. A one-bedroom apartment in the complex costs $765 per month.
“Housing is very capital-intensive. And affordable housing requires a combination of federal, state, local city-level funds, and grant sources,” said John Gilbert, co-owner of Pacific Crest Affordable Housing, which built the Azimuth flats. “The biggest of those funds are the low-income housing tax credits, which typically fund about 75-80% of those projects. This project was a $14 million project. So that translates to something like $10-11 million from low-income housing tax credits.”
Oregon allocates low-income housing tax credits to developers for about 10 projects a year, who in turn work with a partner to sell them to other organizations, usually around the same price as they will save in taxes. The biggest buyer of these credits are banks because they fulfill a legal obligation to invest in low-income communities under the Community Reinvestment Act, a 1977 law that sought to reverse the effects of redlining.
Wyden said he pushed for 2018 legislation that increased the allocation of low-income tax credits to the state by 12.5%, adjusted the income test to average tenant salaries, which previously did not allow tenants if an individual crossed the 60% threshold. He also co-sponsored a 2021 bill that would fund more low-income housing tax credits and backed an additional $29 billion in expanded low-income housing tax credits across the country. Build Back Better Act.
“The Low-Income Housing Tax Credit is, dollar for dollar, one of the best housing investments you can make. Residents like it, developers find it has the least amount of red tape possible. And so, we’re going to build on that,” Wyden told reporters.
Critics of low-income tax credits say the bureaucracy involved inflates the cost of building housing, that it costs the federal government more than $9 billion a year, that it’s hard to sustain as low-income housing after affordability restrictions expire and that it concentrates people in low-income housing. income communities where opportunities may be limited. Around 90% of all newly created affordable rental housing uses the credit, and a report covering the years 2011-2015 found that the program funded around 50,000 low-income housing units.
Wyden also discussed clean energy tax credits, which the Azimuth complex has also used. He called the Inflation Reduction Act the biggest investment in climate change in the country’s history. The bill includes $260 billion in clean energy tax credits that subsidize energy efficiency improvements for individual homeowners.
Bill covers 30% on efficiency upgrades like windows, insulation and appliances up to $1,200 per year, 30% off efficient heat pumps or wood stoves up to $2,000 per year, covers $150 in home energy audits and 30% off rooftop solar panels, battery storage and geothermal heat pumps. Vehicles have up to $7,500 tax credit for new electric or hydrogen fuel cell cars and 30% off up to $4,000 on a clean used car.
Businesses can also take advantage of 30% off efficiency investments such as rooftop solar and geothermal heat pumps, electric vehicle charging stations in low-income and rural areas, and electric vehicles up to at $7,500 for light vehicles and $40,000 for medium and heavy vehicles. Power developers are eligible for a 30% tax credit for zero-emission power installations and industrial companies can get up to $85 per tonne of carbon captured.
“If you’re talking about a commercial building, they can get extended energy efficiency credits of up to $5 per square foot depending on the level of energy savings,” Wyden said. “This is going to get us to a significant fraction of our carbon emissions reduction target by 2030, not 3050 or something else – 2030. Some estimate up to 40% of our carbon emissions target carbon by 2030.”
Wyden also spoke about his proposal to create a middle-income housing tax credit that would cap rents at 30% of the area’s median income and be eligible for those earning 100% or less of the AMI.
“In central Oregon, if you have a firefighter and a nurse who are struggling to find a roof over their head, they are going to benefit from [the middle income housing tax credit]Wyden said. “These firefighters and nurses, middle-income people who work hard and play by the rules in central Oregon, they’re going to have a shot at being part of the American dream.”