Extension; affordable housing tax credit
One significant change introduced in HB 2270 is the increase in the cap for tax credits available. Specifically, the bill allows for up to $4,000,000 in credits per year through 2023, which is set to increase to $10,000,000 annually from 2024 onwards. This infusion of financial support aims to boost affordable housing projects across the state, thereby addressing ongoing housing shortages and affordability challenges for low-income residents. The department is also required to hold public hearings annually, inviting community feedback on the efficacy and allocation of these tax credits.
House Bill 2270 aims to amend Arizona's Affordable Housing Tax Credit program by extending the allocation and eligibility criteria surrounding the tax credits available for projects meeting federal low-income housing standards. The bill empowers the Arizona Department of Housing to administer tax credits for qualifying projects that utilize the federal low-income housing tax credit under section 42 of the internal revenue code and have commenced operations after June 30, 2022. The proposal mandates that the department follow its established qualified allocation plan for the distribution of these credits.
Despite its well-intentioned goals, HB 2270 has sparked discussions regarding the effectiveness of tax incentives in creating substantial affordable housing. Critics argue that merely extending tax credits may not suffice to tackle the housing crisis fully. They also express concerns about potential misallocation of funds and the importance of monitoring the actual outcomes related to the housing units generated through these credits. To mitigate these concerns, the bill includes stipulations for annual reporting by the department to assess the impact of the credits on affordable housing unit availability and evaluates its overall economic ramifications for the state, which will help to hold the program accountable.