Ohio has created a housing tax credit program to increase the supply of affordable rental housing, but it may be in vain without sensible tax reform, lawmakers say.
The goal of the local tax code is to help developers offset the cost of developing rental housing for low-to moderate-income households by offering tax credits.
However, Congressman Pat Tiberi, R-OH, noted during a Bipartisan Policy Center (BPC) conference in Ohio that while most regulators are aware of the program's benefits, there needs to be a distinction between the local tax code and other national efforts to create affordable housing, such as the Department of Housing and Urban Development's Section 8 program.
Tiberi believes the local Ohio tax code in relation to affordable housing is just too complex and confusing. He fears the maze-like structure of the code, without improvements, will allow opponents to make the case for doing away with local tax credits for affordable housing altogether.
"One program can’t go away and be absorbed by others. The context of tax reform shouldn’t go away because there is still a need there," Tiberi explained.
He added, "It’s my job and your job to create the context of making our tax code simpler and to advocate for the continuation of this credit to Americans."
The complexity of the tax code has killed local communities in another way, Tiberi asserts. The complex structure has stymied economic growth within Ohio, while states with simpler codes are attracting new residents and businesses.
The goal is to reduce the tax code to entice individuals back into Ohio, driving up employment rates and, in turn, fueling a growing housing market, he suggested.
To meet this end goal, Tiberi is pushing for a simpler tax code that will provide more opportunities and flexibility to potential buyers and low-income families looking for residences.
"The greatest thing about this program and its decision of structure is that it’s not a decision coming out of Washington — even though it’s a tax code — there’s not some guy in some descript building that doesn’t know anything about Ohio," the congressman said.
He added, "Decisions are being made right here, in our state."
Still, he asserted, those decisions need to be made in a competitive fashion with the tax structures of competing states in mind to spur local growth and housing initiatives. Right now, Tiberi believes at least one of those initiatives is not being met.
