Stakeholders support broadening affordable-housing tax credit to aid distressed properties and first‑time buyer funds
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Summary
Testimony on House Bill 3236 (dash 3) described changes to the Oregon Affordable Housing Tax Credit to fix a sunset date and allow use of credits to stabilize financially or physically distressed affordable housing and to pair the credit with certain mortgage funds for first‑time buyers.
The House Committee on Housing and Homelessness heard proponents on House Bill 3236 with the dash 3 amendment, which would make technical and programmatic changes to the state's Affordable Housing Tax Credit (OHTC). Witnesses said the changes would preserve affordable multifamily housing at risk because of inflation and higher insurance costs and would allow a narrow expansion of OHTC benefits to some mortgage‑fund products for first‑time buyers.
Bill VanVleet, executive director of the Network for Oregon Affordable Housing (NOAH), explained that the OHTC allows lenders to offer below‑market interest rates on loans for affordable housing and claim an offsetting state tax credit equal to the foregone interest income. The dash 3 amendment corrects an oversight in the statute's sunset date and permits the Oregon Housing and Community Services (OHCS) to allocate the credit to existing properties that meet a defined threshold of financial or physical distress without requiring typical rent reductions.
Ryan Fisher of the Housing Authorities of Oregon told the committee that inflation and climate-driven insurance cost increases had strained the financial assumptions underlying many affordable-housing projects. "Inflation coupled with climate impacts to insurance rates have shredded the presumptions built into the financial plan for much of our affordable housing," Fisher said, urging adoption of the dash 3 changes to let the credit be used to stabilize at‑risk projects.
Supporters said the changes would not create a broad new program but would target preservation for properties meeting established distress thresholds and would allow pairing the credit with narrowly defined mortgage funds (for example, shared-appreciation mortgages offered through a mortgage fund for first-time buyers). Proponents recommended adoption of the dash 3 amendment and passage out of committee.
The committee did not take a final vote during this hearing; proponents said the amendment addresses immediate preservation needs while maintaining the credit's historic role in development and affordability.
Proponents provided a handout and referenced program details and a legislative fiscal notice, and said passage would require further coordination with OHCS and the revenue committee to finalize criteria and allocation processes.