LIHTC Developments Deliver Major Economic Gains in Oklahoma

Low-income housing tax credit (LIHTC) developments in Oklahoma generate substantial economic benefits for the state, reveals a new Urban Institute report.

Researchers reviewed 45 projects completed between 2019 and 2023. These developments received $220 million in federal LIHTCs, $75 million in state tax credits, and $16 million in other programs from the Oklahoma Housing Finance Agency, with some utilizing private-activity bond financing.

“In addition to helping to stabilize prices by increasing supply, building housing can stimulate economic activity, creating good-paying jobs, increasing sales for small businesses, and generating tax revenue,” said the Urban Institute’s Jorge González-Hermoso, the lead author of the report.

The analysis found the developments delivered a number of meaningful impacts beyond the 2,667 housing units they contributed, including:

Producing nearly $814 million in total economic output during construction and more than $186 million over 10 years of operations; Adding more than $400 million in value to Oklahoma’s economy during construction and an additional $167 million over 10 years; Generating nearly $276 million in labor income during construction, which is equivalent to the total income of over 2,100 typical Oklahoman households in annual terms, and an additional $16 million over 10 years of operations; Supporting 4,043 “job-years” during construction (which typically lasts about two years per project), including direct, indirect, and induced employment, and approximately 57 unique jobs for people involved in property operations over a 10-year period statewide. The report notes that this is equivalent to the impact of a recently announced Inola plant in the state, which is expected to be the largest primary aluminum production plant built in the United States and is estimated to create 4,000 jobs during construction. Job-year represents one full-time equivalent job supported for one year; Generating over $126 million in tax revenues during construction and over 10 years of operations. This means that the projects recover more than 43% of state and federal investment via tax revenues alone; and Delivering strong economic returns on public investment, with each dollar of tax credit equity associated with $3.40 in total economic output, $1.95 in added value, and $1 in labor income. Of the developments analyzed, 30 are new construction and 15 are acquisition-rehab projects.

“Affordable housing development not only helps address persistent housing supply shortages and affordability challenges but also serves as a durable source of economic activity and public revenue both during construction and during the period of operation,” says the report. “As Oklahoma considers strategies to expand housing supply and support community development, affordable housing investments are a lever that can advance both housing stability and economic growth.”

Learn more by reading the Urban Institute’s “How Affordable Housing Contribute to Local Economies and Tax Revenues: Jobs, Growth, and Income Generated by Low-Income Housing Tax Credit Projects in Oklahoma” report by González-Hermoso, Yonah Freemark, and Katie Fallon.

LIHTC Developments Deliver Major Economic Gains in Oklahoma

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