LOUISVILLE, KENTUCKY, AUG. 12, 2024……No state is immune from the nationwide scarcity of 1.5 million housing items, however every should discover its personal strategy to focus on its distinctive challenges, state lawmakers mentioned at a nationwide assembly final week.
Cameron Rifkin, a coverage affiliate with the Nationwide Convention of State Legislatures, mentioned throughout an NCSL summit panel dialogue that the scarcity has been growing over time as building has did not sustain with demand, amongst different elements.
Previously three years, nonetheless, state legislatures have been trying to handle root causes.
Frequent themes embrace incentivizing building, stopping displacement, strengthening eviction protections, preserving naturally present inexpensive housing, revising zoning laws, allowing extra density, increasing transit-oriented growth and regulating investor purchases and short-term leases.
Kansas, for instance, enacted the Inexpensive Housing Tax Credit score Act and the Housing Investor Tax Credit score Act (HB 2237 of 2022) for inexpensive housing initiatives.
This yr, Maryland prohibited native governments from proscribing placements of manufactured houses in a zoning district that permits single-family residential use.
Illinois has proposed imposing a tax on sure actual property funding trusts and restricted legal responsibility firms that buy single-family residences.
Kentucky, this yr’s NCSL summit host, has launched an inexpensive housing caucus and has a Housing Activity Pressure that’s exploring complete approaches, just like Ohio’s Choose Committee on Housing.
“We began seeing payments roll into native governments with good intentions, however you’ve acquired to take a look at unintended penalties,” Kentucky Rep. Randy Bridges, R-Paducah, mentioned. “We determined to place a job power collectively to deliver anybody and everybody to the desk. Hopefully subsequent session we’ll have plenty of good laws to push ahead.”
Whereas Kentucky’s housing scarcity has doubled up to now three years, housing-related tax credit are “not an possibility,” Bridges mentioned.
“We’re consecutively reducing our revenue tax from 6 p.c to now 4 p.c, and it’s scheduled for 3.5 p.c in 2025,” he mentioned. “We are able to’t quit income to achieve income.”
Maybe the biggest current funding got here from Minnesota, the place Gov. Tim Walz, now the Democratic nominee for vp, final yr signed a $1 billion housing omnibus.
The large invoice was doable on account of a multibillion-dollar surplus that constructed up as lawmakers repeatedly did not agree on makes use of, Minnesota Rep. Steve Elkins, DFL-Bloomington, mentioned.
It included $200 million for down fee help packages, $200 million in housing infrastructure investments, amongst different earmarks, and created a everlasting funding stream for housing wants throughout the state.
This yr, the Minnesota Legislature is concentrated on enacting reforms.
“All of us agreed it doesn’t matter how a lot we acceptable” if there are nonetheless limitations to construct, Elkins mentioned.
He helped introduce one other omnibus, tackling “each zoning reform concern below the solar,” however has determined to interrupt it into element elements and chip away at points one by one, he mentioned.
“I’m hopeful that may give us the leverage we have to get stuff carried out,” Elkins mentioned.
A “build-more” experiment in Minneapolis has already seen success, he mentioned, in contrast with a St. Paul initiative for lease stabilization.
“It’s a must to hold constructing,” Elkins mentioned. “Housing is a commodity, and the general market is pushed by provide and demand. If you wish to hold it at an inexpensive degree, construct extra housing.”
Washington state Rep. April Berg, D-Mill Creek, mentioned she has been making an attempt to extend property taxes for houses over $3 million by 1 p.c, which might be used as a devoted funding supply for a housing belief fund.
Additional complicating Washington’s fiscal response to the housing disaster is the state’s constitutional uniformity clause that forestalls a progressive property tax, in addition to the 1 p.c levy cap.
In a artistic transfer, the state has enacted an annexation gross sales tax credit score to encourage cities to tackle elements of unincorporated counties. That interprets to higher service for residents and elevated tax bases for municipalities, Berg mentioned.
“We put a sundown on it as a result of we would like it to occur rapidly,” she mentioned.
The state handed the Covenant Homeownership Act, which offers down fee help for folks negatively affected by redlining.
Berg mentioned it’s the first laws of its form within the nation.
[Krista Kano is a staff writer for Gongwer Ohio/State Affairs. Reach her at kkano@stateaffairs.com or on X @krista_kano.]
