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FOR IMMEDIATE RELEASE
June 17, 2005

Gov. Blagojevich signs legislation to extend the Illinois Affordable Housing Tax Credit
Five-year extension will leverage millions from private and public sectors to create and preserve affordable housing across Illinois

CHICAGO – Governor Rod R. Blagojevich today signed into law House Bill 603, which immediately extends the Illinois Affordable Housing Tax Credit for five more years.

 

“Working families want the peace of mind and stability an affordable home can give them. They want these homes near their work so they can spend more time together and get involved in their communities. For seniors, people with disabilities and homeless individuals, a home is a much needed blessing,” said Gov. Blagojevich. “The Illinois Affordable Housing Tax Credit helps thousands of people in the state build their lives on the strong foundation of a safe and decent home.”

 

The Illinois Affordable Housing Tax Credit is a powerful incentive that encourages the private sector to donate cash, securities, land, buildings and materials to nonprofit sponsors of affordable housing developments. The tax credit provides a 50-cent state income tax credit for each $1 donated. In its first three years, $40 million in Illinois Affordable Housing Tax Credits leveraged $80 million in donations for the creation or preservation of more than 5,000 homes at a total development cost of more than $644 million.

 

HB 603, sponsored by State Representative Arthur L. Turner (D-Chicago) and State Senator William E. Peterson (R-Buffalo Grove) extends the sunset provision of the Illinois Affordable Housing Tax Credit from December 31, 2006 to December 31, 2011.

 

“The Illinois Affordable Housing Tax Credit is an excellent example of effective state government - government that encourages people from the private, public, and nonprofit sectors to work together to meet the needs of Illinois residents. This bill will help the state’s neediest residents get a safe, secure home they can afford,” said state Rep. Arthur L. Turner (D-Chicago).

 

Effective use of state resources to create and preserve affordable housing is Gov. Blagojevich’s top housing priority as outlined in Building for Success: Illinois’ Comprehensive Housing Plan, the state’s first housing plan. Extension of the Illinois Affordable Housing Tax Credit is one the goals of the Housing Plan. Affordable housing increases family and community stability, provides jobs and economic growth through the housing industry, and gives Illinois a competitive edge in attracting investment, which generates a larger local and state tax base and improves Illinois’ overall fiscal health.

 

“We know that affordable housing strengthens communities and families. The passage of the Illinois Affordable Housing Tax Credit is a public policy milestone achieved through bi-partisan leadership at the city and state government level. These efforts, along with those of housing stakeholders and the foresight of the Governor, provide a financial tool that will help non-profit, business and public sectors solve a growing problem in Illinois - lack of affordable housing,” said Kevin F. Jackson, Executive Director, Chicago Rehab Network.

 

The Illinois Housing Development Authority and the City of Chicago allocate Illinois Affordable Housing Tax Credits. The Illinois Affordable Housing Tax Credit may be applied to Illinois personal or business income taxes. It may be carried forward for up to five years if the tax credit exceeds the donor’s tax liability the year the donation was made. Receipt of the Illinois Affordable Housing Tax Credit does not alter eligibility for federal charitable deductions. In fact, a donor can receive as much as 85% of the donation in tax relief when the Illinois Affordable Housing Tax Credit and the federal charitable deduction are used jointly.

 

“When government works best, it does not work in a vacuum. Instead, it creates programs and incentives that encourage advocacy organizations, nonprofit groups, private businesses and the public sector to collectively use their resources to make a positive difference in people’s lives. The Illinois Affordable Housing Tax Credit achieves that goal,” said Illinois Housing Development Authority Executive Director Kelly King Dibble.

 

“Extending the Illinois Affordable Housing Tax Credit will help us provide quality affordable rental and for-sale housing to low- and moderate-income working families, the elderly, and the disabled in neighborhoods throughout Chicago,” said Chicago Housing Commissioner John G. Markowski.

 

The Illinois Affordable Housing Tax Credit includes an annual $2 million dollar set aside that is the backbone of Illinois’ nationally recognized Employer Assisted Housing (EAH) program. 

 

 

“With support from the Illinois Affordable Housing Tax Credit, the Statewide Housing Action Coalition works with employers to create EAH programs that help employees obtain affordable housing near their jobs,” said Nate Hutcheson, Employer Assisted Housing Project Coordinator for the Statewide Housing Action Coalition. “Extending the credit ensures we can continue to help employers, employees, and communities throughout the state enjoy the benefits of employer assisted housing.”

 

EAH programs for low- and moderate-income working families help Illinois businesses reduce turnover and become more competitive, help communities reduce traffic congestion and air pollution, and help Illinois residents begin to build equity in their own homes and create stability for their families and the future. More than 100 employers have donated nearly $5 million to help more than 240 employees purchase a home through the Illinois Affordable Housing Tax Credit EAH program.

 

The demand for affordable housing in Illinois exceeds the supply so it is essential to preserve existing affordable housing stock. More than 1,900 homes have been rehabilitated and their affordability maintained through investment of $197 million leveraged by $12.3 million in Illinois Affordable Housing Tax Credits. The tax credit has been a key resource for community revitalization. It has been used to help finance small developments where only a few units were feasible, as well as large community redevelopment efforts with hundreds of homes.

 

“The Illinois Affordable Housing Tax Credit makes strong economic sense. The tax credit helps communities achieve economic diversity, overcome barriers to homeownership and stretch limited resources to increase access to affordable housing,” said Brian Hollenback, Housing Director for Rock Island Economic Growth Corporation. “The Illinois Affordable Housing Tax Credit is a critical tool for community revitalization and has helped Rock Island develop a better playing field to recruit and retain employees and improve community stability.”

 

Nonprofit sponsors of affordable housing developments and developers interested in the Illinois Affordable Housing Tax Credit and individuals or businesses that would like to make a donation should contact the Illinois Housing Development Authority at 312/836-5200 or the City of Chicago at 312/742-0467. HB 603 is effective immediately.

 



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