Low-income housing rules need a review
The question of whether low-income housing should be reserved solely for those with low to moderate incomes would seem to be self-evident.
It's obvious, at least on the surface, that housing built with the advantage of federal tax credits ought to cater exclusively to people who need assistance -whose incomes lag well below the average.
But in Thursday's Portland Tribune, reporter Peter Korn demonstrates that the issues surrounding affordable housing aren't as clear cut as the general public might think they are.
In his research, Korn discovered that some people residing in apartments constructed with the help of tax credits no longer meet the low income limits required for them to move there in the first place. A handful of those tenants, whose apartment rents are kept below market rates due to the tax credits, even make more in income than the average Portland resident.
Support program by improving it
We should pause here to emphasize that no one - neither building owner nor tenant - is doing anything wrong. They are following the rules established by the Federal Low Income Tax Credit Program, which is administered by the state. We also believe that the tax credit program has done more to encourage quality affordable housing in recent years than any other initiative from either the feds or the state.
But true support for a worthy program doesn't mean turning a blind eye to a potential flaw. If ordinary citizens perceive that tax credits are being abused - or not exclusively benefiting low-income people, as intended - then public support for a good cause will wither.
Along the way, we all should remember that tax credits come at a cost. When such credits are provided to owners of affordable-housing projects, the tax dollars that go uncollected have to be made up somewhere else. That means all other taxpayers must contribute a bit more, or some other government service will receive less funding. A single project can generate millions of dollars in credits, so the impact is not meaningless.
State should look at rules
The reason we - and many others - support these credits at all is our conviction that the benefit to society is worth the foregone tax revenue. Without such tax incentives, investors and developers would put their dollars to work in higher-end projects that promise better returns in the marketplace. The result would be fewer affordable housing choices.
But there is another reason the state should explore tightening rules around tax credits for affordable housing: For every tenant who stays in an apartment after his or her income rises above the limit, there are numerous people on a waiting list for that housing - people who also need a cheaper place to live while they climb the financial ladder.
We don't know exactly what the state should or can do to ensure that, within a reasonable period of time, higher-earning people are phased out of their tax-credited, low-income apartments. But we can say that support for the tax-credit program will be stronger, and more low-income Oregonians will be served, if new affordable housing units are constructed with clear requirements not only for who can move in - but also for who can remain.