Sen. Rotundo introduces bill to expand funding to affordable housing development

Posted: January 25, 2024 | Senator Rotundo, Taxation

LD 2106 would increase the per-project cap on the popular Maine Historic Property Rehabilitation Tax Credit

Sen. Peggy Rodundo introduces LD 2106, “”An Act to Accelerate the Production of Affordable Housing and Strengthen the Historic Property Rehabilitation Tax Credit,” before the Taxation Committee.

AUGUSTA — On Wednesday, Sen. Peggy Rotundo, D-Lewiston, introduced a bill to expand and improve funding for an existing, popular affordable housing tax credit. LD 2106, “”An Act to Accelerate the Production of Affordable Housing and Strengthen the Historic Property Rehabilitation Tax Credit,” was the subject of a public hearing in the Legislature’s Taxation Committee.

“By now, all of us know that Maine is experiencing an affordable housing crisis, brought on by the Great Recession of 2008 and made considerably worse by labor and materials shortages during the COVID-19 pandemic. It’s clear we need to do all we can to increase the availability of affordable housing in our state. Expanding the Historic Property Rehabilitation Tax Credit is a step in the right direction,” said Sen. Rotundo. “In my community of Lewiston, our need is great, and I hear about it virtually every day. It is important to note, however, that this bill will benefit communities all over Maine — not just Lewiston. Ground has been broken on qualifying HRTC projects in 14 of Maine’s 16 counties.”

LD 2106 would expand the amount of the Maine Historic Property Rehabilitation Tax Credit (HRTC) from $5 million per project to $10 million. The bill also would allow organizations that claim the credit to file their refund claims on a calendar year basis, permitting them to benefit more quickly if their tax year differs from the state’s fiscal year. The $5 million cap is the same amount as when the HRTC was enacted in 2008.

The HRTC allows building owners and developers to receive a state tax credit of 35% of qualified expenditures for certified affordable housing projects. (The rate for projects not associated with affordable housing is 25%.) According to a December 2020 report from Maine Preservation, 106 projects were certified in the years between 2009 and 2019. These projects generated $525 million in construction investment, created hundreds of full-time jobs and created or preserved 1,911 housing units, of which 1,300 are considered affordable.

The October 2023 report from the Maine State Housing Authority, the Governor’s Office of Policy Innovation and the Future and the Maine Department of Economic and Community Development estimates that Maine needs over 38,000 homes to meet our current need and roughly 80,000 homes to accommodate our population growth by 2030.

The Maine Municipal Association, Maine Council on Aging, Maine Association of Realtors, Maine Real Estate and Development Association and Maine Community Action Partnership all submitted testimony in support of LD 2106.

The bill faces further action in committee.