U.S. Rep. Mike Kelly (R-PA) helped lead bipartisan legislation that would give added weight in competitive U.S. Department of Housing and Urban Development (HUD) grant applications to projects located in or primarily serving designated Opportunity Zones, with the goal of expanding housing supply and lowering costs.
Opportunity Zones are a federal tax incentive designed to encourage private investment in low-income communities. Investors can reinvest capital gains into designated neighborhoods and receive tax benefits in return, with the program designed to promote long-term investment rather than short-term speculation. While private investment plays a major role, federal housing programs administered by HUD remain an important tool for expanding and preserving housing in those areas.
“Opportunity Zones have breathed new life into neighborhoods and Main Street businesses that have not seen private investment in years, all without spending a single taxpayer dollar,” said Rep. Kelly, chairman of the House Ways & Means Subcommittee on Tax.
The Increasing Housing in Opportunity Zones Act, H.R. 7791, would authorize HUD to give priority when awarding competitive housing grants related to the construction, rehabilitation, or preservation of housing in Opportunity Zones. The priority would apply only to grants designated by HUD as “covered grants” and would be optional rather than mandatory, preserving full flexibility for the agency.
“This new legislation builds upon the successes of Opportunity Zones and leverages the tax code to both expand the housing supply and lower costs,” Rep. Kelly said.
H.R. 7791 was introduced on March 5 by U.S. Rep. Josh Harder (D-CA) and was cosponsored by Rep. Kelly. It’s included in the broader 21st Century ROAD to Housing Act, led by U.S. Sens. Tim Scott (R-SC) and Elizabeth Warren (D-MA), which has the support of the Trump administration. If signed into law, that package would represent the largest legislative housing initiative in decades.
Rep. Kelly has long championed Opportunity Zone legislation in the House. Opportunity Zones in Erie, Pa., in Rep. Kelly’s district, have become a national model, spurring more than $150 million in private investment in downtown Erie and generating more than $450 million in additional long-term capital investment, according to the Erie Downtown Development Corporation.