Oklahoma lawmakers will look at recommended changes to the affordable housing state tax credit next year.
The Incentive Evaluation Commission recommends shortening the period the credit may be claimed from 10 years to five. Mental Health Association Oklahoma Chief Housing Officer Greg Shinn said that could mean a building slowdown if developers opt not to build because they're getting less in tax credits and must take on more debt.
"We’re estimating at least 25 percent loss of production of units. So, when we look at what we were doing for the last three years with 2,007 units, we think that there would be a significantly lower amount," Shinn said.
Shinn said developers' other option would be passing their higher costs on to tenants in the form of higher rents.
The other proposed change would allow the tax credit to be used in Tulsa, Oklahoma and Cleveland counties, which have populations above the current cap of 150,000.
"Using it in Oklahoma City and Tulsa would be favorable. Shortening the length of the credit would lower the value of the investment. And so, I think that would be — overall, it would be a negative impact," Shinn said.
Consultants used by the Incentive Evaluation Commission said as things stand, the tax credits will cost the state $106.1 million over 10 years, the difference between increased state tax revenue and the value of tax credits.
A report from the Oklahoma Department of Commerce by the Oklahoma Coalition for Affordable Housing found over the past three years, $15 million in credits contributed to 36 developments, meaning 3,900 jobs, 2,007 affordable rental units and a total economic impact of more than $575 million.
"The jobs created, the housing that would be affordable for families, that’s not something that you want to turn back the dial on. You want to increase production, not decrease it," Shinn said.
According to a 2015 statewide assessment, Oklahoma needs more than 11,000 new rental units for low-income families by 2020.