New tax credits, loans and grants aim to expand housing options in Midwest’s rural areas
May 18, 2022
In some of the Midwest’s rural communities, one oft-cited barrier to growth has been a lack of housing, a concern that led to the enactment of new laws this year in states such as Kansas, Nebraska and South Dakota.
- In Kansas, as part of this year’s HB 2237, a series of new tax credits will be available for projects that increase the state’s supply of affordable housing, preserve and restore older commercial structures, and build in communities that lack sufficient housing. The same measure also includes a loan guarantee program for financial institutions that support the construction or renovation of single-family homes in rural counties. Separately, Kansas’ budget (SB 267) establishes a $20 million Rural Housing Revolving Loan Program and sets aside another $20 million for the development or renovation of moderate-income housing.
- Nebraska legislators have extended and expanded a five-year-old law that provides grants to nonprofit developers who collaborate with local governments on the construction of workforce housing in counties of fewer than 100,000 people. Eligibility is contingent on local matching funds, which often are raised with the help of employers. One of the changes in this year’s LB 1069 will reduce the local matching requirement.
- State and federal funds will be used in South Dakota to build up the housing infrastructure, through a mix of new grants ($100 million) and low-interest loans ($100 million). Grants for any project cannot exceed one-third of its total costs. As part of HB 1033, too, legislators specified that 30 percent of these new funds go to projects in municipalities with 50,000 residents or more; 70 percent of the grants and loans must support projects in other areas of South Dakota.