WASHINGTON, June 20, 2019 /PRNewswire/ -- Bipartisan
legislation introduced this week would create a new federal tax
credit to fuel rehabilitation of deteriorated single-family homes
and attract $100 billion in
development activity to distressed communities across the
country.
The Neighborhood Homes Investment Act (NHIA), introduced by
Reps. Brian Higgins (D-N.Y.) and
Mike Kelly (R-Pa.), would encourage
private investment in an estimated 500,000 homes that, because of
their poor condition, depress nearby property values and thwart
broader revitalization efforts.
NHIA is designed to address a difficult market reality in many
communities: the cost for developers to acquire and rehab blighted
properties or build new homes exceeds what they could earn when
they sell the homes. The NHIA tax credit would help them fill that
gap, up to 35 percent of the eligible development cost, and thereby
reduce their risk of loss. It would encourage investment, create
affordable homeownership opportunities, and support widespread
revitalization in urban, suburban, and rural communities.
"We've seen great success with historic, new markets and other
tax credit programs that encourage investments in larger projects
that have the ability to transform communities," said Rep. Higgins,
who represents the 26th district in western New York. "But true community revitalization
must reach into the heart of our neighborhoods. This legislation
seeks to provide an incentive to tackle some of the projects that
may be more challenging but serve a much larger goal of preserving
the character of our communities and lifting up working families
and neighborhoods."
Rep. Kelly, from northwestern Pennsylvania's 16th congressional
district, added, "Too many of America's neighborhoods of
single-family residences are falling into disrepair, and the
incentive to invest in these communities is non-existent. I am
excited to offer this solution because it will do so much for so
many communities, like Erie,
throughout our country."
NHIA tax credits would be awarded to project sponsors—which
could include developers, lenders, or local governments—through
statewide competitions administered by state housing finance
agencies. Sponsors could use the credits to raise investment
capital for their projects, and the investors could claim the
credits against their federal income tax when the homes are sold
and occupied by moderate- and middle-income homebuyers.
"Every state has neighborhoods where the homes are in poor
condition and the property values are too low to support new
construction or substantial renovation," said Carey Shea, a New
Orleans-based developer who is part of the Neighborhood
Homes Investment Coalition, a group of nonprofit and financial
organizations advocating for the bill's passage.
"The lack of move-in ready homes makes it difficult to attract
or retain homebuyers, which causes property values to decline. A
modest subsidy through the tax credit would break this downward
spiral by simply filling the gap between the cost of building or
renovating homes and the price at which they can be sold," Shea
said.
The Coalition estimates that the NHIA would support a
substantial economic impact over the next 10 years. In addition to
the 500,000 homes that would be rehabbed and $100 billion in development activity, estimated
impacts of this legislation include:
- 785,714 jobs in construction and construction-related
industries
- $42.9 billion in wages and
salaries
- $29.3 billion in federal, state,
and local tax revenues and fees
About Us
The NHIA Coalition is a national advocacy group comprised of 17
organizations, including housing and community development
nonprofits, financial institutions, and related trade
associations—all supporting enactment of the NHIA. Please visit
neighborhoodhomesinvestmentact.org for additional
information.
Contacts:
Matt Josephs
Local Initiatives Support Corporation
mjosephs@lisc.org
202-739-9264
Carey Shea
Neighborhood Homes Investment Coalition
carey@homebyhand.org
504-914-7150
Buzz Roberts
National Association of Affordable Housing Lenders
broberts@naahl.org
202-293-9853
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SOURCE LISC