Establishes a state low-income housing tax credit for the development or construction of low-income housing (OR -$1,000,000 GF RV See Note)
House Bill 685 aims to establish a state-level income or corporate franchise tax credit for developers of qualified low-income housing projects in Louisiana. This tax credit is designed to complement the existing federal tax credits available under Section 42 of the Internal Revenue Code. The state tax credit will be set at 9% of the federal credit for the first three years after the project is placed in service and drop to 3% in the fourth year. The bill also sets a limit of $1 million per calendar year on the total amount of credits issued, categorized under a first-come, first-served basis. This approach aims to incentivize the creation of affordable housing options within the state, particularly in designated enterprise zones.
The intent of HB 685 is to encourage more investments in low-income housing by supporting developers through tax relief. A significant feature of this bill is the requirement for participating projects to involve a non-profit organization throughout their development and operational phases. Additionally, the bill emphasizes the need for job training and education for residents through local workforce boards, ensuring that these housing projects not only provide shelter but also contribute to the economic upliftment of the communities involved. This multifaceted approach aligns housing assistance with workforce development.
The sentiment regarding HB 685 appears largely positive among proponents, particularly those advocating for affordable housing solutions in Louisiana. Supporters argue that the bill could stimulate the market for low-income housing and help address the existing housing crisis, offering essential benefits to both residents and developers. However, there have been notable concerns in legislative discussions over the funding limits, efficiency in implementing the credits, and the effectiveness of the proposed requirements for community involvement.
Conversely, critics of the bill voice skepticism about the adequacy of the allocated tax credits and whether they will be sufficient to motivate meaningful construction of low-income housing. There are concerns regarding the potential bureaucratic hurdles for developers navigating the certification process of the credits. The discussion reflects a broader tension in legislative priorities between immediate economic incentives and sustainable, long-term community investment.