Senate committee hears testimony on bill to end Kansas affordable housing tax credit

A state Senate committee heard more than a dozen speakers on a bill that would end Kansas’s state affordable housing tax credit program, House Bill 21-19, and voted on no formal action during the hearing.

The bill, as amended in the House, would discontinue the Kansas Affordable Housing Tax Credit Act on July 1, 2025, while preserving credits allocated under the Kansas Housing Resources Corporation (KHRC) qualified allocation plan (QAP) through the 2025 QAP. Supporters of the state credit warned that ending the program would sharply reduce the production of low-income housing; opponents and KHRC counsel raised legal and drafting concerns about the amendment’s wording.

Supporters said the state credit has materially expanded affordable housing production in Kansas. Dustin Hare, economic security policy advisor for Kansas Action for Children, cited statewide data and personal experience and urged the committee "to keep housing in the budget." He said rents have risen roughly 20% on average since 2019, 43% of Kansas renters are now cost-burdened, and unsheltered homelessness rose about 395% between 2019 and 2024. "With the rate of homelessness ... quadrupling over 5 years, that's a systemic problem that needs to be addressed," Hare said.

Industry witnesses said the state credit leverages private investment and local jobs. Mitch Robinson, executive director of the Salina Community Economic Development Organization and president of the Kansas Economic Development Alliance, described how the program helped Salina respond to major private-sector expansions by bringing developers and contractors to the city. Tony Krenich, owner of Flint Hills Development Group and speaking for the Kansas Housing Association, told the committee the state program helped finance roughly 2,138 units in 2023 and about 2,596 units in 2024, representing several hundred million dollars of investment he said largely stayed in Kansas. Krenich proposed a compromise to preserve funding scaled to the federal 9% credit level — $8,800,000 per year beginning in 2026 — describing that as a 65% reduction that might be acceptable to some stakeholders.

KHRC general counsel Erin Beckerman explained how the state credit pairs with the federal low-income housing tax credit (Internal Revenue Code Section 42) and said the agency has used the state credit to expand projects into counties that previously received few awards. Beckerman flagged one drafting concern in the House-amended text: the amendment substituted the broader term "low income housing tax credit" for the state credit in a subsection, which KHRC attorneys fear could be read to limit or confuse KHRC’s authority to allocate federal LIHTC awards as well as the state credit.

Other witnesses testified on the human impacts and local needs. Talita Lykem, a licensed clinical social worker from Overland Park, described clients who would be homeless without the state and federal tax-credit–funded housing and said she frequently provides crisis services to people whose housing instability affects their health.

Several industry witnesses said they were open to compromise options such as shortening the credit carry period or restricting which classes of credits are funded, but said an outright repeal would sharply cut expected production. Speakers repeatedly cited program mechanics: the LIHTC credit period is a 10-taxable-year credit period beginning when a building is placed in service, and Kansas law allows unused credits to be carried forward for up to 11 tax years. Witnesses also cited proposed state funding scenarios presented to legislators, including multi-year allocations that some described as reaching up to $250 million over time in earlier budget proposals.

Committee members asked for more detail on definitions and program mechanics. A senator asked for a lay explanation of "60% of area median income" eligibility under Section 42 developments; a witness said a 60% AMI unit in a Kansas city such as Lawrence would typically serve a household with approximately $40,000 in annual income and that rent is commonly set at up to 30% of income. Committee members also asked about where units are being built; KHRC and industry witnesses pointed to a published map and lists of awardees in the meeting materials, and KHRC said the state credit broadened geographic reach to counties such as Colby, Russell and projects in Manhattan and Lenexa.

Chairman Alley closed the hearing without a committee vote and noted the committee would not meet the following day but would reconvene on the 10th and 11th to take up other bills and return to previously heard measures. The House previously passed HB 21-19 on Feb. 20, 2025, on a recorded vote of 85-36; that House passage was described in testimony before the committee but was not acted on at this hearing.

The hearing record includes testimony from housing developers, design professionals, KHRC staff and nonprofit advocates who urged retaining some state support to preserve ongoing projects and pipeline investments.