Rural Mayors Call on Governor Hobbs to Include Rural Low Income Housing Tax Credit in FY27 Budget

Roughly half of the nation’s state legislative bodies budget money for state Housing Tax Credit programs, unfortunately, Arizona lawmakers allowed our state’s successful program to expire at the end of last year. This made Arizona the first and only state in the nation to do so and is a loss to Arizona cities’ efforts to facilitate affordable housing projects.

We have been actively working alongside fellow advocates to reestablish the program, with new legislation focused specifically on rural Arizona—where affordable housing options are scarcest, and the financing gaps are greatest. Republican Representative Teresa Martinez introduced such a bill—supported by Flagstaff’s Representatives Blackman, Peshlakai, and Tsosie, and Senators Hatathalie and Rogers—and it passed out of the House. Unfortunately it stalled in the Senate so we reached out to rural mayors from every corner of the state and 32 signed on to our letter to Governor Hobbs, asking her to include money for the program in her FY27 budget.

Our request is to allocate $12M annually for 10 years for rural affordable housing, allowing us to leverage private investment by providing state tax credits that make projects financially feasible. None of the tax credits are issued until a project is completely built and occupied by tenants. This means there is no financial impact to the State General Fund for this fiscal year, and likely the next several years.