Proponent Testimony — Chris Hite, Sugar Creek Capital, House Bill 3 (Ohio, March 14th, 2023)

Summary

Proponent testimony of Chris Hite, President of Sugar Creek Capital, dated March 14th, 2023, before the Economic and Workforce Development Committee on House Bill 3. The testimony states that Sugar Creek Capital is a national leader in state low-income housing tax credit investments and has helped to create safe, affordable housing for nearly 20,000 families and seniors. It states that state housing tax credits are the most efficient way to leverage the federal tax credit program and that Ohio taxpayers will not spend a dime until the apartments are built and qualified families begin to move into their new homes.

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                 Economic and Workforce Development Committee
                           House Bill 3 (Proponent Testimony)
                           Chris Hite – Sugar Creek Capital
                                  March 14th, 2023

Chair Swearingen, Vice Chair Santucci, Ranking Member Upchurch, and members of the
Economic and Workforce Development Committee.

My name is Chris Hite, President of Sugar Creek Capital and I am excited to voice our support
for House Bill 3. We are a national leader in state low-income housing tax credit investments,
which benefit working families and fixed-income seniors. We work directly with federal
investors, developers, and lenders to structure affordable housing investments. We bring
decades of experience in the development, syndication, construction, and management of
diverse residential properties, and I am here to answer any questions I can on the program
and to help lay out how the creation of a state affordable housing tax credit program can be a
major economic driver for Ohio.

With it partners, Sugar Creek Capital has helped to create safe, affordable housing for
nearly 20,000 families and seniors in communities throughout the country. We would
encourage members of the committee to tour similar projects in Ohio so you can see
firsthand the high quality of today’s affordable housing units at rents that are attainable for
working families and fixed-income seniors.

This program is one that builds on an already highly successful federal program. The federal
Low Income Housing Tax Credit program, commonly referred to as LIHTC, is the largest and
most successful program in the United States for building and preserving quality, affordable
housing. As states look for ways to effectively use their resources to expand on this work,
state housing tax credit programs have quickly become the preferred tool for state
legislatures. State housing credit programs have risen in use because they are efficient, spur
economic activity, and are highly accountable. Kansas was one of two other states this year
to pass similar programs as the one proposed here, which are comparable to highly
successful programs in states like Georgia, South Carolina, and Missouri—all states where
our company is actively investing because of this economic incentive.

State housing tax credits, in fact, are the most efficient way to leverage the federal tax credit
program to serve more families. Just like additional equity can buy down a mortgage and
lead to a lower monthly payment for a typical homeowner, the equity generated by a state
credit
program allows for reduced rents for the long haul. The reality is that alternative funding
options like loans must be paid back. Even grant funds create taxable events, due to federal
policy, that add significant costs. For this program, the equity generated from a state credit
stays in the deal, meaning lower—more affordable—rents. Further, this program is
administratively efficient, since a state credit program can simply piggyback on the existing,
established federal tax credit infrastructure at the Ohio Housing Finance Agency.

State credits are also a key tool to spur economic activity and jobs. They quite simply allow Ohio
to do more in both rural and urban areas of the state. All of this work is done with increased
accountability compared to other funding programs because state credit programs only pay for
success. The private market shoulders the up-front costs, through investments from companies
like ours, and Ohio taxpayers will not spend a dime until the apartments are built and qualified
families begin to move into their new homes. Even then, the impact of the foregone revenue is
spread over a further 10+ years to maximize accountability and compliance during operations
and mitigate the budgetary impact in any one year.

As Ohio seeks to remain competitive for these types of developments and the private
investment that comes with them, this program is a win-win for the state. Sugar Creek Capital
looks forward to making significant investments in Ohio.

Chair and members of the Economic and Workforce Development Committee, thank you for the
opportunity to provide proponent testimony and I ask consideration to pass HB 3. I would be
happy to answer any questions you may have.


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