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Affordable rental housing

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across the state is

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getting a boost with

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the Wisconsin Housing and

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Economic Development

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Authority announcing

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nearly $50 million in housing

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tax credits to developers.

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So how do the tax credits

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accrue to developers?

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This is a great question.

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Housing tax credits work

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very differently than so many

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other kinds of tax credits.

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A developer or a community

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applies for competitive or

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noncompetitive tax credits

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and they sell those credits

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to an investor.

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The investor has the ability to

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write down their tax liability

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for up to 10 years

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depending on the

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type of credit

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for that amount every year.

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So, for instance

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a $1 million tax credit award

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can generate something like

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$9 million in equity

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awarded by developers who

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will for 10 years write off

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a $1 million investment

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from their tax liability.

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The value of tax credits

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to housing is it

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makes it possible for

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the development of housing that

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will be income and

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rent restricted, but

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still operate in a

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sometimes profitable way

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but certainly a solvent way.