The Affordable Housing Tax Increment Financing (AHTIF) Program offers municipalities a flexible financing tool to assist affordable housing projects and support related infrastructure and facilities by designating a specific area of the municipality as an affordable housing development district and adopting an affordable housing development program for the district. AHTIF enables communities to use the incremental tax revenues from the affordable housing district to help make the housing affordable and to pay for related costs.
Communities using AHTIF also avoid the decreases in state revenue sharing and state education subsidy and increases in county taxes that otherwise would occur with increased property values from the AHTIF district.
Eligible uses of incremental tax revenues from a district include:
- Costs inside the AHTIF district: Capital and operating costs of affordable housing and public infrastructure improvements, related soft costs, support services for residents of the affordable housing, and costs of recreational and child care facilities.
- Costs outside the AHTIF district:
Costs outside the AHTIF district can be funded with tax increment revenues from the district only if those costs are directly related to or made necessary by the establishment or operation of the district, and then only to a proportional extent. Examples include infrastructure and public safety improvements, costs to mitigate adverse impacts (including to local schools), and costs to establish a permanent housing development revolving loan or investment fund.
The AHTIF statute at 30-A M.R.S.A. §§5245-5250-G sets out the required elements of an AHTIF district and its affordable housing development program. Key requirements include:
- At least 25% of the district area must be suitable for residential use, and development within the district must be primarily residential.
- At least 33% of the housing units in the AHTIF district must be for households earning no more than 120% of area median income.
- The affordability of rental units must be maintained for at least 30 years, and the affordability of homeownership units must be maintained for at least 10 years.
The designation of an AHTIF district and the adoption of a program to develop affordable housing in the district must first be approved by the municipality’s legislative body after a minimum 10-day public notice and a public hearing. Maine law requires municipalities to apply to MaineHousing for review of the district and development program approved by the municipality to ensure compliance with the conditions set out in the AHTIF statute.
Applications to MaineHousing must be submitted on the Application for Affordable Housing Tax Increment Financing. The information on the first two pages of the application, which is in fillable PDF format, needs to be provided along with the attachments listed in the application, but municipalities have the flexibility to provide information about the AHTIF district and the development program in a format of their own choosing, as long as the requirements of the AHTIF statute are met.
To assist municipalities in complying with the AHTIF statute’s requirements, the application includes some guidance on the various conditions of the statute that need to be satisfied and the information that MaineHousing will be looking for when it reviews the district and development program approved by a municipality. We encourage municipalities to provide us with a draft of the proposed AHTIF district and development program before it is submitted to their legislative body for approval.
For more information, see the related documents or contact:
AHTIF Program Administrator