The lack of housing supply in urban and rural markets has become a major corporate site location concern for companies considering developing a project in most communities. If housing is not available for a company’s workers, it does not matter how great the local and state economic development incentives are or how low the cost of doing business or how great the workforce is. The state of Ohio through the passage of the state operating budget recently made a major move to make the development of additional housing a critical focus for the Buckeye State. The state operating budget supporting the growth of housing in Ohio through funding with several programs.
New Ohio Low Income Housing Tax Credit (LIHTC). Governor DeWine and the General Assembly created a new Low Income Housing Tax Credit. Providing up-to $100 million in FY24-25 for the new Ohio Housing Finance Agency (OHFA) Tax Credit program. The new program is meant to support the construction of new housing projects in the state. Throughout Ohio the need for quality new housing is at an all-time high, development has not been able to keep pace with population and job growth in certain regions, while in others the need to replace outdated housing stock with newer units has hampered the ability to attract and retain people and jobs. This program along with other tools is a step in the right direction to helping to solve what is quickly turning into a crisis that impacts the states affordable living environment.
New Ohio Single Family Affordable Housing Tax Credit. Like the Low-Income Housing credit, the new single family affordable housing credit will allow up-to $50 million in available credits each fiscal year for the development and construction of new Single Family Homes.
New Ohio First-time Homebuyer Savings Accounts. The operating budget also created a new program to support the growing cost for a first-time homebuyer through the creation of a new tax deduction for saving into a linked0-deposit account designated for the cost of a first-time home buyer. Ohio’s who create an account are eligible for a deduction of up to $10,000 per year per account for couples filing jointly and $5,000 per year per account for individuals, with a lifetime maximum per account of $25,000. The budget authorizes, for account owners, an income tax deduction for interest earned on savings in, and employer contributions to, homeownership savings linked deposit accounts.
Welcome Home Ohio Program. The new program appropriates $50 Million in each fiscal year in new funding in grants to “land banks” to rehabilitate or construct residential properties for income-restricted owners designed to support the revitalization of neighborhoods while providing new or renovated housing options for owners. The program will provide grants of up-to $30,000 for the purposes of the grant and will require properties to be maintained as a single family owned home and will prohibit the rental of the property during a five-year period after the grant is awarded. Under the leadership of Governor Mike DeWine, the Ohio General Assembly illustrated the importance of housing as a critical economic development issues facing communities across the state.
Budget addresses key development hurdle. A key issue to building new housing in the state has been the ability to identify land and to get the appropriate zoning approved for housing development to occur. In recent years the state has seen housing developments stalled or in some cases canceled due to the overturning of township zoning changes. Under current law a zoning ordinance can be put on the ballot in a township for referendum by collecting signatures of not less than 8% of the total vote cast in a township for all candidates for governor at the most recent general election. The budget adopts a higher threshold of 15% to increase the number of electors in a township it will take to reverse the zoning decisions of the elected township trustee board. This change is an important improvement to help address the state’s housing challenges. Without the ability to build new single-family and multi-family homes in areas where Ohioans have chosen to live, due to the desires of small number of residents the state will be at a continued disadvantage when it comes to closing the gap on new housing starts in the state.