Affordable housing in Oklahoma
By: J. David Chapman/May 14, 2020
I had the opportunity to sit down with local affordable housing expert Andrea Frymire this week. While Oklahoma is frequently touted as an affordable place to live, it’s not affordable for everyone.
Recent research from the National Low-Income Housing Coalition shows Oklahoma ranks 43rd for housing costs and Oklahomans need to earn at least $15.54 per hour in order to afford a modest two-bedroom apartment. According to the 2015 Oklahoma Statewide Housing Needs Assessment, Oklahoma needs 11,630 units for families and seniors earning 60% or less of the area median income and 40.01% of renters are cost-overburdened. 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 act is capped at $4 million per year and is a nonrefundable 10-year credit. The federal and state credits are for households earning 60% or less of the AMI and are allocated annually by the Oklahoma Housing Finance Agency.
Between 2015-2019, OHFA allocated $19.1 million in state affordable housing tax credits to provide financing for 47 developments across 30 counties.
Using the IMPLAN model, the Oklahoma Department of Commerce found that these 47 developments created a direct impact of over $380 million in construction activity and are estimated to create over $830 million in economic activity between 2017 and 2021. The temporary construction activities impact is over $688 million.
During construction, over 4,800 jobs are impacted. Permanent employment for the 2015-2019 allocation is estimated at 125 jobs, which directly generate over $3.9 million in labor income. These jobs directly generate over $36 million in economic activity for the state. An additional 128 jobs are supported through induced impact spending by employees in the local market and indirect impacts from spending by leasing companies with local businesses. This employee spending and indirect effects contribute about $54 million in economic activity annually.
The overall economic impact of the act, as allocated between 2015-2019, exceeds an estimated $839 million and will revert to $54 million in annually from ongoing operations.
The 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 benefits, such as better school attendance, higher graduation rates, reduced Medicare spending, or reduction in homelessness.
J. David Chapman is an associate professor of finance and real estate at the University of Central Oklahoma (jchapman7@uco.edu).