In the affordable housing world, most of the attention California has been getting is centered around the seemingly-inevitable dissolution of the state’s Redevelopment Agencies (RDA). Housing developers and advocates have become increasingly concerned over the potential fall-out if RDAs do, in fact, cease to exist. Many worry that, low-income housing will also cease to be a priority and the state’s most vulnerable residents will suffer as a result. However, earlier this year, housing advocates received some positive news.While developing and assessing language for California Assembly Bill 643, state lawmakers found that about $350 million that was made available under the state’s Hiring Tax Credit was never used. The credit is awarded to employers who hire and keep new employees for a specific amount of time in positions at or above a pre-determined rate of pay. Though employers had incentive to hire, low consumer demand weighed more heavily on their decisions than did the possibility of a tax credit. As a result, lawmakers began looking at possible alternative uses for the tax credits; uses that might actually stimulate the economy.Legislators also found that states like Mississippi and Illinois have used New Market Tax Credits to leverage federal funding of low-income community developments. On average, $13 in federal tax credits were made available for every $1 in state credits.They decided to follow examples set by nine other states and begin offering a state-level New Market Tax Credits (NMTC). If the legislation becomes law, the NMTC program would go into effect in 2013 and will be set to expire on December 1, 2020.The NMTC program began in 2000, and is intended to encourage private investment in low-income communities. The federal program, on which California’s is based, offers a credit equal to 39 percent of the total dollar amount an individual or business invests in a Community Development Entity (CDE). CDEs are financial institutions that provide loans and financial counseling in low-income communities. Over the years, CDEs have helped finance the building and rehabilitation of thousands of affordable residences, both single-family and multi-unit. By funding housing development, CDEs also help generate both short- and long-term jobs in the communities where they’re needed most.The California bill (AB 643) mirrors federal regulations, allowing an individual to claim a tax credit equal to 39 percent of the total amount that individual invested in a qualified development project; financial institutions, retail businesses, schools and real property are all considered “qualified projects.” It allows a total allocation of $50 million per year in New Market Tax Credits. In addition, unused tax credits from any year will be rolled over and made available the next year.If California becomes the 10th state to successfully implement a NMTC program, other states may quickly develop programs of their own.