The Housing Opportunity Tax Incentive Act

1. The Housing Opportunity Tax Incentive Act Problem: • Concentration of Vouchers in High-Poverty Areas. • Lack of Landlord Interest in Areas of Job Growth – “Opportunity Areas.” • “On the Street” rents variation greater than Sect 8 Program flexibility.

2. HB 2246 = P.A. 93-0316 The Housing Opportunity Tax Incentive Act A Solution: HB 2246 is now Public Act 93-0316

3. PA 93-0316The Housing Opportunity Tax Incentive Act The Housing Opportunity Tax Incentive Provides: • Market-based incentive for landlords • Targeted to “Opportunity Areas” • Safe-guards to prevent over-concentration of vouchers.

4. How Do You Attract the Landlord? • Tax Abatement • One Month’s Rent • Simple Application Process

5. What is the Benefit to Landlordfor a qualified unit? 2-Flat in Naperville: Market Value $250,000 Tax Rate 8.0% Incentive (Tax Abatement) $633.27 A 50 unit apartment in Lakeview: Market Value $8.75 million Tax Rate 7.5% Incentive (Tax Abatement) $1,496.25

6. Does Program Have Other Limitations on the Incentive? • Limit number of units that qualify per building – 2 or 20% • Limited time benefit – 10 years • Allow a municipality to opt-out of the Program if HCV units become concentrated – 2.5% of dwelling units • Require landlords who receive the incentive to maintain good buildings – Substantial compliance with building codes

7. How Do You Target the Opportunity Area? • By Township – Tax base as indicator of wealth and job growth. • By Census Tracts – To prevent small concentrations of poverty in affluent areas.

8. PA 93-0316 The Housing Opportunity Tax Incentive Act Here is how the Tax Capacity test works: STEP ONE -Total EAV of County divided by Population = “Per capita EAV of County.” STEP TWO -Total EAV of Township divided by Population = “Per capita EAV of Township.” STEP THREE -Compare “per capita EAV” of Township to “per capita EAV” of County to determine ratio.

9. PA 93-0316 The Housing Opportunity Tax Incentive Act First Test: Qualified Township using Tax Capacity test: “Per capita EAV” • Outside Cook – Qualified Twsp = >100% of County per capita EAV • Cook – Qualified Twsp = >115% of County per capita EAV

10. PA 93-0316 The Housing Opportunity Tax Incentive Act Second Test: Identify Low-Poverty Census Tracts: Under 10% Poverty

11. HB2246The Housing Opportunity Tax Incentive Act –Qualified Areas – Twnsp & Census Tract

12. HB2246The Housing Opportunity Tax Incentive Act –Chicago Low-Poverty Census Tract

13. HB2246The Housing Opportunity Tax Incentive Act –Qualified Townships in Du Page County

14. HB2246The Housing Opportunity Tax Incentive Act –Qualified Townships in Will County

15. HB2246The Housing Opportunity Tax Incentive Act –Qualified Townships in Lake County

16. HB2246The Housing Opportunity Tax Incentive Act –Qualified Townships in Kane County

17. HB2246The Housing Opportunity Tax Incentive Act –Qualified Townships in McHenry County

18. PA 93-0316 The Housing Opportunity Tax Incentive Act For more information: Contact: Ken Oliver Protestants for the Common Good 200 N. Michigan, Suite 502 Chicago, IL 60601 (312) 223-9544