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House approves workforce housing tax credit after divided debate
Summary
The Montana House passed House Bill 21 to create a state workforce housing tax credit, 75-25, after extended debate over program cost, administration and allocation method.
The Montana House on Friday approved House Bill 21, creating a state workforce housing tax credit intended to help finance low-income and workforce housing projects, by a vote of 75 to 25.
Sponsors and supporters said the credit is designed to close financing gaps that prevent developers from building rental housing affordable at lower rent levels. Representative Brewster, the bill sponsor, told the House the credit would work as gap financing alongside federal low-income housing tax credits and other funding and require projects to maintain rent restrictions for 30 years before owners may change use or rents.
Backers described the program as a proven tool used in other states and argued it would spur construction and jobs. Representative George Niklokakos cited federal-state examples and committee testimony estimating economic returns and projected that a state match could unlock roughly 1,300 additional housing units in a short period.
Opponents focused on cost and administration. Representative Volk questioned the fiscal note language that references "0.5 pay band 6 FTE," seeking clarification about program staffing; discussion in the House indicated the fiscal note contemplated a half-time position at pay band 6 and that agencies estimated several full-time equivalents would be needed to run the program. Representative Jed Hinkle opposed the bill on free-market grounds, saying state intervention can distort markets. Representative Schubert objected to allocating credits through a board process rather than a strictly performance-based automatic credit.
Supporters replied that the allocation process is intended to ensure projects meet standards before receiving credits and that funds are released only after projects are built and occupied. Representative Brewster emphasized that awards would be paid only after project completion and occupancy, creating opportunities to withhold funds if projects fail to meet requirements.
Motion and vote: Representative Brewster moved that the committee recommend House Bill 21 "do pass." The clerk recorded 75 votes in favor and 25 opposed; the motion passed and HB 21 advanced after second reading.
Next steps: The bill passed second reading and will proceed through the legislative process for further consideration and final passage steps.
