A New Workforce Housing Tax Credit Bill Advances in Montana House
The Montana House made progress on a workforce housing tax credit bill, House Bill 21, with strong bipartisan backing. This bill, inspired by the federal Low-Income Housing Tax Credit, seeks to tackle the state’s ongoing housing shortage and high housing costs. The proposed state credit would be managed by Montana’s Board of Housing to support affordable housing projects. Proponents argue the bill will ensure affordable housing remains a priority for Montana’s workforce.
Rep. George Nikolakakos, R-Great Falls, noted Montana missed out on 1,300 housing units since 2019 due to the absence of such a program. “It’s a program that gets shovels in the ground,” Nikolakakos said. The bill proposes $1.5 million in credits annually for six years, as per legislative analysis. Sponsor Rep. Larry Brewster, R-Billings, acknowledged the bill’s cost but stressed its necessity due to Montana’s housing crisis. He highlighted that affordable rent will be secured for at least 30 years.
Rep. Mark Thane, D-Missoula, emphasized the success of housing tax credits in other states and their potential to alleviate Montana’s housing challenges. He pointed out current projects are not financially viable for low-income residents. The Montana Housing Coalition defined “affordable” housing as costing no more than 30% of a household’s income, including utilities. Rep. Jed Hinkle, R-Belgrade, opposed the bill, arguing government intervention disrupts the free market.
The bill gained support from Democrats and 33 Republicans, though 25 Republicans opposed it due to its financial implications. The most significant expense projected is $9 million from the general fund. During a House Tax committee hearing, developers and affordable housing advocates supported the bill, citing its economic benefits. The Montana Society of CPAs opposed the credit, suggesting direct funding instead. Sam Sill from the Montana Bankers Association noted the credit’s potential to aid the working poor.
Support came from the Montana Chamber of Commerce, NeighborWorks Montana, and other associations. A 2022 study by the University of Montana indicated potential economic benefits, estimating $2.69 in public and private spending for every dollar lost in tax revenue. Michael O’Neil of the Helena Housing Authority cited the study, suggesting 40% more low-income housing units could be constructed annually if the program is implemented.
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