Testimony — House Bill 3, Pat Tiberi, Ohio Business Roundtable

Summary

Testimony of Pat Tiberi, President and CEO of the Ohio Business Roundtable, to Chairman Swearingen and the House Economic and Workforce Development Committee on House Bill 3. The testimony describes the Roundtable as a statewide business association of CEOs and Presidents of top companies, whose members employ over 512,000 Ohioans and generate revenue of more than $1.5 trillion. It states that Pat Tiberi previously served in the U.S. House of Representatives. The conclusion calls the bill another essential tool to help communities attract investment and house workers, and urges support.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

Chairman Swearingen, Vice Chair Santucci, Ranking Member Upchurch and members
of the House Economic and Workforce Development Committee, thank you for the
opportunity to present testimony on House Bill 3.

My name is Pat Tiberi and I am the President and CEO of the Ohio Business
Roundtable, a statewide business association of CEOs and Presidents of the top
companies in the state. We currently have just over 100 members and the companies
collectively employ over 512,000 Ohioans and generate a revenue of more than $1.5
trillion, which helps support Ohio’s economy.

Our membership is inclusive of industry leading companies representing over 20 Ohio
industries which includes—but is not limited to—companies such as KeyBank and
Huntington representing the banking sector; American Financial and Nationwide in the
insurance sector; Kokosing representing construction; CareSource, Cleveland Clinic,
and many of Ohio’s children’s hospitals representing healthcare; The Ohio State
University and Miami University in the higher education space; Owens Corning, RPM
International, Inc, and Procter & Gamble in the manufacturing sector; AEP and
NiSource in energy and utilities; and many more.

In my current role, I have had the opportunity to work with many of you to better the
business climate of our state. For those of you who may not know, I previously served
in the U.S. House of Representatives and was a member of the Financial Services
Committee and Ways and Means Committee, which has jurisdiction over housing
issues. Prior to my time in Congress, I was in your shoes as a member in the Ohio
House. In the 121st General Assembly (1995-1996), I chaired the equivalent of this
committee—the House Economic Development and Small Business Committee. I look
forward to working with you this General Assembly on legislation important to the
business community, such as House Bill 3.

Today, I am here in support of House Bill 3, which authorizes a nonrefundable state
tax credit that can pair with the federal low-income housing tax credit (LIHTC) for
workforce housing projects.
Currently, Ohio is experiencing a dire lack of housing at every price point in various
regions throughout state. We have seen a significant increase in the cost of housing
because of increased demand in parts of our state, which will only continue with the
economic development projects that our state has recently won.

While I believe Ohio’s outlook has improved in our state economic development-wise
over the last 8 years, we still lost a Congressional seat—again—last year. We may have
added quite a few economic development wins throughout the state recently, but only
a third of Ohio counties gained population according to the 2020 census data.

However, within those 32 counties, the crunch is on to find housing, and that demand
will only grow as the projects such as Honda, Intel, GM, Abbott, and more become
operational.

Why does OBRT care about housing? We care about economic development. You
cannot care about that without caring about workforce and ensuring we have the
capacity in our state to house the workforce. We do not right now. Employers are
concerned by this trend, and realize this shortage will make Ohio less competitive if it
continues.

History of the Tax Credit
I was a Congressional staffer when the landmark 1986 tax bill was passed in bipartisan
fashion with a Democrat House and Republican President, Ronald Reagan. The Reagan
Administration came up with a brilliant idea to deal with affordable housing, which at
that point was a federally regulated and owned program, with the exception of the
Section 8 voucher program. President Reagan’s idea was to unleash the private sector
in support of competition with state government oversight in all 50 states, but with a
federally supported tax credit.

This was a significant change in how housing would be built and operated across the
country. In this new proposal, private developers and nonprofit developers compete
for federal tax credits issued by each state. Banks would lend to those developers for
the project. Private investors would invest. Developers would receive a fee up front,
but their profit would be capped and not guaranteed. As a result, you had private
market forces putting pressure on the developer from the investors, from the banks,
and from the state, which would result in a much more market-based development
being built, but it was still able to provide housing at an affordable rate. In fact, so
much so, that these projects were no longer the substandard housing complexes we
had come to associate with affordable housing.

The program became so successful that many state legislatures, both Republican and
Democrat, passed their own state tax credit for workforce housing that can be
combined with the federal credit to attract for-profit and non-profit developers and
investors.

Unfortunately, in our state today, while demand has created a lack of supply at all
levels, the economics to build affordable housing are not market based. Land prices
are often inflated and climbing in areas where housing is in most demand. Both issues
cause housing to be more expensive and harder to build in areas that need it most.
Having an additional tax credit will help solve at least part of that problem.

OHFA Role in Ohio’s Tax Credit
House Bill 3 represents the only housing program that the state can play a role in and
does so through the Ohio Housing Finance Agency (OHFA).

The Ohio Housing Finance Agency plays a critical role, providing financing for the
development and rehabilitation of affordable housing through the LIHTC program.
They also maintain comprehensive data and information about every tax credit project
across the state, including the amount of the credit, profits, and rent. You may hear
that developers are making money off this program, but the reality is, there is a cap on
what exactly an affordable rate developer can earn.
For most, this is not free housing—residents can be gainfully employed, yet their salary
does not accommodate the rapidly increasing housing prices.

OHFA also maintains information on the income limits to qualify for the program in
each county, which are higher than you may think. Workforce housing properties that
utilize this tax credit can house anyone within 30 to 80 percent of the county AMI,
however the average income for all residents within the property combined cannot
exceed 60 percent.

For example, the top end of the 2022 income limit in Franklin County was $52,500
annually for an individual (~$25/hr) and $74,950 annually for a family of four (~$37/hr),
which represents 80 percent of the county’s average median income (AMI). Sixty
percent of the AMI in Franklin County is $39,360 annually for an individual and $56,220
annually for a family of four. In contrast, in Belmont County the top qualifying income
level (80% of AMI) is $41,040 annually for an individual and $58,560 for a family of four.

When applying for the workforce housing, an individual’s rent is calculated to be 30
percent of their income. If they were to receive a raise, their rent would continue to be
30 percent of their income and they can continue living within the complex so long as
their income does not exceed 80 percent of the area median income (AMI). This helps
prevent a tenant from turning down raises or from losing their housing based on a
promotion.

I want to acknowledge that the program offers tremendous flexibility for communities.
The Catholic Diocese of Columbus is a large organization using these tax credits to
provide affordable housing to seniors, ensuring they have a good quality of housing to
accommodate their needs as they age. Additionally, the National Church Residencies
has used these credits with the Veterans Administration to establish veteran housing.
During my time as a Congressman, I worked with the National Church Residencies to
establish a facility that provided veterans a place to live for up to a year, giving them
the opportunity to get sober, find employment and get back on their feet. In order for
a property to offer this type of accommodation, however, it has to be subsidized by an
outside entity, not the state. Furthermore, these examples are the exceptions, not the
rule.

Local Involvement
It is important to note that House Bill 3 does not change the current zoning statutes.
Local governments still maintain their authority to adopt and enforce zoning
regulations and can decide whether to permit these workforce housing projects in
their areas. This will only continue to incentivize developers to offer high quality
projects to communities.

Businesses Grapple with Housing Shortage
Ohio businesses of all kinds are leaning in on this housing issue in innovative ways.
There are real examples of Ohio businesses purchasing homes or building homes for
their workforce.

In Licking County, Bechtel, an international construction firm that is building the fabs
for Intel, is taking an all-of-the-above approach to housing their workforce. From
purchasing homes, to building apartments, to renting hotels, and anything else they
can think of, they are working tirelessly to find solutions to house thousands of
workers.

Conclusion
House Bill 3 will serve as another essential tool in the toolbox to help communities
attract investment and assure that the construction workers, service industry workers,
and others will have the housing needed to support these economic development
projects across the state. This will not solve every problem in the housing world in
Ohio, but it is certainly a step toward addressing the shortage.

I respectfully urge your support of this important legislation. Thank you for the
opportunity to testify. I am happy to answer any questions.


File and source

File

2023-03-21_econ-workforce-dev_testimony_testimony-1427.pdf

Size

287,323 bytes

SHA-256

af6aac3113dabaad6e5bf389824ba8e0e644b36acf48db4909a478e610733707

Our copy

2023-03-21_econ-workforce-dev_testimony_testimony-1427.pdf

Original

No public link identified.