COLUMBIA, SC (WSPA) – State lawmakers are one step closer to bringing back a suspended affordable housing tax incentive program.
Earlier this year, state leaders halted the Workforce and Senior Affordable Housing Program due to it’s popularity and “unexpected impact on the General Fund.”
The tax credits were created in 2020. They are designed match the incentives developers get from the federal government.
Officials said the program led to the development of thousands of affordable housing units in South Carolina. It was expected to cost the state about $16 million over ten years. Instead, it’s estimated about $25 million in credits were approved in just one year.
The House and Senate passed bills they said will ensure the future of the program by capping how much in tax credits can be divvied out every year.
The House wants to allocate $25 million a year. The Senate’s bill would allocate $15 million.
During a Senate Finance Committee meeting, Sen. Nikki Setzler (D-Lexington) said, “We had not one person who was opposed to this program. In fact, the reverse is true, everybody believes that affordable housing is an absolute necessity in South Carolina.”
The bills would make the process for getting a tax credit more competitive, instead of “first come, first serve.”
Lawmakers and housing advocates said the program is much needed. According to the most recent federal data, nearly a quarter of South Carolina renters spend more than half their income on housing.
Humanities Foundation is a nonprofit affordable housing developer in South Carolina. President Tracy Doran said the state tax credit is the single most important thing lawmakers can do to increase the production of affordable housing in South Carolina.
“Affordable housing is important for everyone, whether you need, your family needs or people moving here to work in our businesses,” Doran said. “It’s all relative. There’s a huge need for it across the state not only in the urban areas but rural areas as well.”
According to Doran, they had projects in the pipeline when the incentives were halted.
“As soon as the law is passed those dollars will go right to work to create affordable housing across the state,” she said.
Doran said the more money lawmakers allocate for the program, the better.
Both bills have been sent to the other chamber, later this year lawmakers could hold a conference committee to hash out the differences between the two bills.