POAH receives innovation award for proposal to create affordable housing donation tax credit

May 9, 2016

POAH has received the top innovation award for its proposal to create a new "affordable housing donation tax credit" (DTC) for Massachusetts from The Home Funders, a collaborative formed in 2003 to address the unprecedented crisis in affordable housing for very low income families in the state. The tax credit would use a portion of the existing state housing credit to encourage the donation of existing housing to nonprofits who agree to preserve it as affordable for the long-term.

The proposal is modeled on successful programs in only a few other states. The DTC would provide a credit against state income tax liability to property owners who donate existing housing to qualified nonprofits. The nonprofits, in turn, would commit to keeping the housing affordable over the long term (per SLIHTC requirements).

The savings in each housing project that utilizes DTC would then be used to add extremely low income (ELI) units in the property. POAH estimates that these DTC strategies could support conversion of 15-30% of a DTC project’s units to be affordable to extremely low income households without needing additional operating subsidies.