Evanston Affordable Housing Project Highlights Need to Extend Key State Tax Credit

EVANSTON -- An affordable housing development moving forward in Evanston is shining a spotlight on a critical state program that housing advocates say must be extended to keep projects like it on track across Illinois.

The Evanston City Council recently approved the final steps needed to transfer city-owned land at Church Street and Darrow Avenue, clearing the way for a 33-unit affordable apartment building. The project, led by the Housing Opportunity Development Corporation in partnership with Mt. Pisgah Ministry, is expected to break ground in the coming months after overcoming legal and community hurdles.

At an estimated cost of $22 million, the development reflects the complex financing required to bring affordable housing projects to life. Alongside federal low-income housing tax credits and local support, developers are relying on the Illinois Affordable Housing Tax Credit to help close remaining funding gaps.

That program—often called the “donations tax credit”—provides a state income tax credit worth up to 50% of the value of donations made to nonprofit developers. According to the Illinois Housing Council, it has generated more than $510 million in donations and supported the creation of approximately 26,000 affordable housing units statewide since 2001.

But with the program set to expire at the end of 2026, housing advocates warn that developments like Evanston’s could become far more difficult to finance.

The Illinois Housing Council, which has been leading advocacy efforts in Springfield, is pushing lawmakers to extend the tax credit for another decade and modestly increase its capacity to support additional projects. Advocates say the program is one of the most effective tools available to attract private investment into affordable housing without placing a major burden on the state budget.

From IHC’s perspective, the Evanston project is a clear example of how the tax credit works in practice—helping unlock private donations that make developments feasible in communities facing rising housing costs and limited supply.

That need extends far beyond Evanston. Communities across Illinois—from suburban neighborhoods to smaller cities—are grappling with affordability challenges driven by higher construction costs and growing demand. Without continued state support, advocates say, fewer projects will move forward, slowing efforts to expand access to safe, affordable housing.

As the General Assembly enters the final weeks of its spring session, housing groups are urging lawmakers to act. Extending the tax credit, they argue, will ensure that projects like the one in Evanston are not the exception—but part of a sustained effort to meet Illinois’ housing needs.

Read the original article: https://evanstonnow.com/the-push-to-strengthen-a-state-affordable-housing-tax-credit/