Minnesota Housing Tax Credit Contribution Fund: MHP champions innovative new tool to spur private investment in housing
- Created: Wednesday, 14 March 2018 15:16
- Written by Laura Proescholdt
Since its inception in 2011, North Dakota's Housing Incentive Fund (HIF) has leveraged roughly $5 for every $1 invested, creating more than 2,500 units across the state. A proven tool to incentivize private investment and promote community and economic development, MHP is advancing a bill (H.F. 4072 | S.F. 3301) at the Minnesota Legislature to create the Minnesota Housing Tax Credit Contribution Fund, modeled after North Dakota's HIF.
The Minnesota Housing Tax Credit Contribution Fund will encourage local businesses and neighbors to invest in their community by creating housing opportunities. The program is capitalized by contributions from taxpayers that have state income, corporate, or insurance premium tax liabilities. In exchange for contributions to affordable housing, participating taxpayers receive credit against their state income tax liability equal to their contribution to a specific development or the general loan pool. The program relies on taxpayer support to provide low-cost financing to developers of affordable housing.
“This model is needed in Greater Minnesota,” says Skip Duchesneau, President of D.W. Jones, which develops affordable housing in 25 different communities across Central and Northern Minnesota. “We need straightforward, effective tools – like the Minnesota Tax Credit Contribution Fund – that allow local businesses to partner with developers to meet pressing local needs for affordable, workforce, and senior housing. The Tax Credit Contribution Fund would be an efficient state investment that leverages private, state, and federal resources to positively impact communities across the state.”