U.S. Rep. Mike Kelly (R-PA) on June 9 sponsored a bipartisan bill that would establish a tax credit for neighborhood revitalization across America.
The Neighborhood Homes Investment Act, H.R. 3940, which has five original cosponsors, including U.S. Reps. Randy Feenstra (R-IA) and Brian Higgins (D-NY), would create the new tax incentive to produce 500,000 starter homes in under-resourced communities over the next decade, according to a bill summary provided by Rep. Kelly’s staff.
“For too long, the cost of rehabilitating a home has been more expensive than simply starting from scratch. Now, the Neighborhood Homes Investment Act will allow homeowners and developers to more affordably restore beautiful homes and create more affordable housing in communities that need it the most,” Rep. Kelly said. “This legislation creates stronger homes, stronger families, and stronger neighborhoods.”
Specifically, H.R. 3940 would authorize the award of the tax credits to project sponsors through statewide competitions administered by state housing finance agencies. Sponsors, which could include developers, lenders, or local governments, would use the credits to raise capital for their projects, and investors would claim the credits against their federal income taxes, the summary says.
H.R. 3940 also would provide that the credits only be claimed for homes developed or rehabilitated in eligible low-income communities, and only after the homes are sold and occupied by lower or middle-income families.
“The United States is experiencing an affordable housing crisis and my community of western New York is not immune,” said Rep. Higgins. “I am proud to join my colleagues in leading the bipartisan Neighborhood Homes Investment Act, which closes the value gap these neighborhoods face with a tax credit that encourages investments in single family homes and leads to community revitalization.”
The National Community Stabilization Trust, the Local Initiatives Support Corp., and the National Association of Affordable Housing Lenders supports the measure.