State tax credit demand far exceeds supply; advocates press Legislature to fund LIHTC

The Tax Credit Allocation Committee told the subcommittee that demand for low‑income housing tax credits far outstrips available state allocations and bonds, and speakers urged the Legislature to fund the state Low‑Income Housing Tax Credit (LIHTC) or other programmatic support.

TCAC Executive Director Marina Wyatt summarized program mechanics and recent trends: the state credit (which augments the federal 9 percent credit) and the enhanced credits paired with tax‑exempt private activity bonds have unlocked additional production, but recent years have seen extreme oversubscription. Wyatt said the statutory state credit is roughly $126 million a year in today's dollars and that a $500 million supplemental state credit approved in prior years was widely oversubscribed.

Legislative questions and staffing: Committee members asked how multi‑year commitments or predictable, multi‑year allocations could stabilize production. TCAC said predictability helps moderate booms and busts and that uncertainty at federal program levels would increase the need for state resources. TCAC also requested operating authority to add three compliance and management positions to handle workload generated by AB 2873 and AB 2006 and by an increasing compliance caseload.

Public comment and advocacy: Housing California and the California Housing Partnership urged a substantial appropriation for the state LIHTC program; Housing Partnership cited a claimed return on investment and leveraged funding figures for prior state investments. Advocates said tens of thousands of projects in the pipeline need state funding to proceed.

Ending: Members signaled interest in the LIHTC funding request and asked budget staff and the administration to provide cost and pipeline analyses as negotiations continue.