Local leaders fear changes to state affordable housing funding could leave Frederick behind

The latest project to benefit from low-income tax credits is the former county government building at 520 N. Market St., which is undergoing renovations and a large addition to become part of a two-building, 59-unit apartment complex.

Signs of Christine Bowie’s late husband, Reginald, fill her one-bedroom apartment, though the couple never lived there together.

“A part of me died when he died,” Bowie, 65, said in a recent interview.

But in her new apartment in Weinberg House, an apartment complex for low-income seniors, Bowie has found hope, and an end to the escalating financial struggles that followed Reginald’s death two years ago. Losing him also meant losing a majority of their shared income. The affordable rent means she no longer has to choose between buying food or paying utility bills, no longer has to imagine the possibility of eviction.

Just as she depended on Weinberg House, the developers behind the project relied on federal tax credits to fill the funding gap that would otherwise come from charging higher rents.

The Low-Income Housing Tax Credit program (LIHTC) has funded 14 affordable housing projects in Frederick since 1999, according to the Maryland Department of Housing and Community Development. The department acts as the local credit agency for the Internal Revenue Service, awarding the state’s share of tax credits to Maryland.

The state’s set of criteria, known as its Qualified Allocation Plan (QAP), is in the midst of an overhaul that will ultimately award extra points to projects in and around Baltimore. Local affordable housing advocates anticipate the changes to the already competitive process will make it even more difficult, if not impossible, for Frederick projects to receive credits.

And without these credits, some say the county’s critical lack of affordable housing will worsen, with consequences for residents of all income levels.

That’s where tax credits come in, creating a public-private partnership between government, private investors and developers. The credits, allocated in proportion to state census populations, offer investors a dollar-for-dollar tax credit over 10 years in exchange for their financial backing on eligible low-income housing projects.

Maryland requires credit-funded projects to set aside at least 20 percent of homes for residents who earn at or below 50 percent of the area median income, or 40 percent of homes for residents who earn at or below 60 percent of area median income. This equaled about $38,650 (50 percent) or $46,380 (60 percent) for a single person in Frederick in 2017.

A state housing department committee reviews applications based on a set of criteria, and forwards recommendations to the state housing secretary for final decision.

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