THE ECONOMIC IMPACT OF THE OKLAHOMA AFFORDABLE HOUSING ACT

By Andrea N. Frymire, CCIM, MRE

While Oklahoma is frequently touted as an affordable place to live, it is isn’t affordable to everyone. Recent research from the National Low-Income Housing Coalition, Oklahoma ranks 44th for housing costs and Oklahomans need to earn at least $16.28 per hour in order to afford a modest two-bedroom apartment. This is up from a housing wage of $15.54 per hour in 2020 and the research was conducted prior to recent inflation and Federal Reserve rate hikes. According to the 2022 The Gap: A Shortage of Affordable Rental Homes, Oklahoma has 131,726 extremely low income (ELI) households and 67% of these households are severely cost overburdened. The Gap also found that only 46 housing units are available and affordable for every 100 extremely low-income renter households. HUD defines cost burdened renters as those that pay 30% or more of their income for housing. Severely cost burdened households pay 50% or more of their income towards housing. One of the ways to encourage the development and preservation of affordable housing for Oklahomans is through effective policy.

The Oklahoma Affordable Housing Act of 2014 established a state affordable housing tax credit that mirrors the federal Low-Income Housing Tax Credit. The Oklahoma Affordable Housing Act is capped at $4M per year and is a nonrefundable ten-year credit. The federal and state credits are for households earning 60% or less of the Area Median Income (AMI) and are allocated annually by the Oklahoma Housing Finance Agency.

With the support of Midwest Housing Equity Group, the Oklahoma Coalition of Affordable Housing commissioned an Economic Impact Report from the Oklahoma Department of Commerce.

Between 2015-2021, the Oklahoma Housing Finance Agency allocated $27,855,620 in state affordable housing tax credits to provide financing for 57 developments across 30 counties.

Using the IMPLAN model, the Oklahoma Department of Commerce found that these 57 developments create a direct impact of over $590 million in construction activity and is estimated to create over $1.67 billion in economic activity between 2017 and 2022.

During the period of construction, over 7,600 jobs are impacted. Permanent employment for the 2015-2021 allocation is estimated at 184 jobs which directly generate over $5.5 million in labor income. These jobs directly generate almost $53 million in economic activity for the state. An additional 183 jobs are supported through induced impact spending by employees in the local market and indirect impacts from spending by leasing companies with local businesses. The employee spending and indirect effects contribute over $78 million in economic activity annually.

The overall economic impact of the Oklahoma Affordable Housing Act, as allocated between 2015-2021 exceeds an estimated $1.67 billion and will revert to over $78 million annually from ongoing operations.

The Oklahoma Affordable Housing Act is a proven tool in assisting in the development and preservation of housing for our seniors and families. The economic impact report does not consider the additional social and economic benefits of the housing produced such as better school attendance and higher graduation rates, reduced Medicare spending or reduction in homelessness.

The Oklahoma Affordable Housing Act has a positive impact, both economically and socially, on our state. Affordable housing is more important than ever as the effects of COVID-19 disproportionately hit our low to moderate income seniors, veterans, and families.

For more information on affordable housing, or to view a copy of the Economic Impact Report, please visit affordablehousingcoalition.org.

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