KHRC highlights Kansas' housing progress through Low Income Housing Tax Credit programs

In a pivotal meeting of the Kansas Senate Committee on Commerce, officials gathered to discuss the impact of the Low Income Housing Tax Credit (LIHTC) program, a crucial initiative aimed at addressing the state's pressing housing needs. The Kansas Housing Resources Corporation (KHRC) presented compelling data, revealing that the introduction of a state credit in 2022 has significantly boosted housing development across Kansas.

Since the implementation of the state credit, KHRC has reported a remarkable increase in funded housing projects, tripling the number from approximately 1,000 homes in 2021 to around 4,800 in 2024. This surge is attributed to the effective pairing of the state credit with the federal LIHTC program, which has been operational since the 1980s. The collaboration has allowed KHRC to expand its reach, funding projects in communities that historically lacked access to such resources, including Colby, Russell, and Hillsborough.

The meeting highlighted the importance of leveraging federal resources, with KHRC noting a dramatic rise in the utilization of federal private activity bonds—from just one affordable housing development in 2021 to 14 or 15 developments projected for 2024, amounting to approximately $250 million. This shift underscores the competitive landscape Kansas faces in attracting developers and investors, especially as neighboring states also offer similar incentives.

However, the discussion was not without concerns. Some committee members raised issues regarding the language in House Bill 2119, which could potentially complicate the allocation of both federal and state credits. The ambiguity surrounding the term "low income housing tax credit" in the bill could lead to confusion and hinder the program's effectiveness.

As the committee deliberated, the notion of compromise emerged as a key theme. Some members expressed interest in adjusting the program to better align with Kansas's current housing needs, suggesting a limit on credits to match the federal 9% rate. This proposal aims to balance the urgent demand for affordable housing with the realities of available resources.

The meeting concluded with a call for clarity and collaboration among stakeholders, emphasizing the need for a unified approach to tackle the housing crisis in Kansas. As the committee prepares to make decisions on the future of the LIHTC program, the discussions from this meeting will undoubtedly shape the landscape of affordable housing in the state for years to come.