State Invests Federal Tax Credits to Boost Affordable Housing Construction
Affordable apartments for people with disabilities, veterans, seniors and working families to be created statewide
CHICAGO, IL – October 23, 2012 – (RealEstateRama) — Nearly 700 affordable rental apartments will be built across Illinois, increasing housing opportunities for working families, seniors and people with special needs and disabilities, thanks to the allocation of federal tax credits approved by the Illinois Housing Development Authority (IHDA) board.
The tax credit allocations will generate an estimated $117.6 million in private equity to support 12 developments. Demonstrating the State of Illinois’ dedication to creating more supportive housing opportunities, more than one-third of the total units will help veterans and people with disabilities find stability in communities.
As the state housing finance agency, IHDA awards the federal low-income housing tax credits (LIHTC) through a competitive process to finance qualified affordable housing developments. Under Governor Pat Quinn, IHDA has allocated federal tax credits generating $657 million in private investment to support the creation and rehabilitation of 8,550 units of affordable housing. With the board’s approval Friday, developers will now seek private investment for the new developments. Construction is expected to begin by next spring.
“Governor Pat Quinn is dedicated to leveraging public-private partnerships to meet the affordable housing needs of working families, seniors, veterans and people with disabilities,” said IHDA Executive Director Mary R. Kenney. “This financing will ensure the long-term affordability of apartments serving Illinois residents, helping to ease the cost of housing. These new developments also will create quality construction jobs to advance our economy.”
Congress created the federal tax credit program in 1986. Federal tax credits generate private investment in affordable housing when the credits are sold to private investors. The equity generated reduces the debt that the developer would otherwise have to borrow. As a result of the lower debt, a tax credit property can offer lower rents. Developments financed with tax credits serve households earning 60 percent or less of the area median income, or $31,860 for a one-person household in the Chicago metropolitan area and $29,400 for a one-person household in the Springfield area.
Developments approved for financing include two developments providing permanent supportive housing for veterans at risk of homelessness. Supportive housing empowers people with disabilities in communities by providing the services they need to live independently. Freedoms Path will transform vacant land at the Edward Hines, Jr. VA Hospital in Cook County into 72 units of studio, one- and two-bedroom supportive housing units serving veterans and their families. Veterans New Beginnings will create 54 apartments for veterans in Chicago’s Auburn Gresham neighborhood, and provide supportive services on the first floor of the development.
Housing for low-income seniors and working families also received tax credit financing, including a development of 46 single-family rental homes in East Alton (St. Louis area) that will offer a unique program allowing tenants to lease-to-own.
A complete list of the developments approved for financing is available at www.ihda.org/developer.
