Young Cosponsors Bill to Address Housing Affordability, Create Jobs, and Encourage Economic Development
Tax credit would encourage renovations, require sales to low-income individuals
WASHINGTON – U.S. Senator Todd Young has cosponsored legislation (S. 4073) to revitalize housing in distressed neighborhoods in Indiana and nationwide. Currently, development lacks in some urban and rural areas because the cost of purchasing and renovating homes is greater than the value of the sale price of homes. The Neighborhood Homes Investment Act (NHIA) will create a federal tax credit to cover the “appraisal gap” that prevents single-family housing development in many low-income neighborhoods. This legislation was introduced by Senators Ben Cardin (D-Md.) and Rob Portman (R-Ohio), and cosponsored by Senators Chris Coons (D-Del.), Sherrod Brown (D-Ohio), and Tim Scott (R-S.C.).
The NHIA could lead to the revitalization of 500,000 homes and create $100 billion in development revenue over the next 10 years. NHIA will require that homes constructed or revitalized under the program must be sold to homeowners making less than 140 percent of the area median income. This ensures that improved housing directly benefits members of the communities targeted by the new tax credit. In addition, homeowners receiving funds for rehabilitation of their property must remain in their homes for five years or face a penalty.
“The Neighborhood Homes Investment Act will help address the housing affordability crisis, create jobs, and encourage economic development. By providing a tax credit to remove and redevelop abandoned buildings, we can incentivize more affordable housing to be constructed in areas that are in need of rehabilitation. This legislation will benefit many communities in Indiana seeking to revitalize,” said Senator Young.
“Everyone deserves a safe and affordable place to call home. Our bipartisan tax credit builds on the success of the Low-Income Housing Tax Credit (LIHTC) and New Markets Tax Credit (NMTC) to attract investment in communities that need it most,” said Senator Cardin. “By creating this incentive in the tax code, we can drive investment and revitalize neighborhoods in Baltimore and across Maryland and keep them affordable for low- to moderate-income families.”
“Even prior to the pandemic, when America was experiencing one of the strongest economies on record, highlighted by consistent job creation and wage growth, there were certain geographic areas and vulnerable populations that suffered due to a lack of opportunity and investment. These areas were often marked by stagnant housing markets, foreclosures, and blighted or vacant homes,” Senator Portman said. “The Neighborhood Homes Investment credit established in this bipartisan bill is directly targeted at bringing new investment to these neighborhoods, providing a new tool in our economic toolkit that pairs well with the New Markets Tax Credit, Opportunity Zones, and the Low-Income Housing Tax Credit. This new incentive will help thousands of vulnerable Ohioans in struggling neighborhoods by revitalizing communities and generating new opportunities for their residents.”
“Amid the ongoing debates about how to address structural inequalities in our country, there are many real, meaningful changes that we can make from the federal level on housing policy,” said Senator Coons. “We need to encourage investment to reach communities and ensure that lower-income households can access the benefits of this new development. The Neighborhood Homes Investment Act would provide opportunities to Delawareans and revitalize communities up and down the state while taking a step to address inequities in housing access across the country.”
“Although the Fair Housing Act made housing discrimination illegal more than 50 years ago, too many of our communities - particularly Black and brown communities – still reflect historic patterns of segregation and racial disparities in wealth and homeownership,” said Senator Brown. “The Neighborhood Homes Investment Act will help overcome historic patterns of disinvestment in low-wealth neighborhoods and give families a chance to build wealth through homeownership in the communities they love.”
“The Neighborhood Homes Investment Act will help create additional home-buying and home equity building opportunities for Americans that for too long have faced countless obstacles when trying to achieve the American Dream of owning their own home,”said Senator Scott. “I have long been an ardent supporter of homeownership, and that includes closing the gap between white and African American homeownership rates in this country. I am proud to introduce this bill with my colleagues to help more Americans make life-long, intelligent investments and foster holistic economic growth and healing in our nation.”
The full text of S. 4073 can be found here. A summary can be found here.
“Addressing the need for more quality, affordable housing has never been more critical. Before COVID-19, many homes in low-income areas had become places where you wouldn’t want to hunker down for long periods. And yet, market conditions limited the possibilities for renovations and reinvestment. So, it’s encouraging to see new life breathed into this legislation by the Senate at a time when we need more and improved housing solutions on the table. We hope to see this tax credit adopted and readily utilized to stimulate spending, boost construction jobs, and improve housing quality through incentivized rehabilitation efforts. We thank Senator Young for his leadership on this bill to strengthen our communities and look forward to the positive impact it can make across the Hoosier state” said Jessica Love, Executive Director, Prosperity Indiana.
“The Local Initiatives Support Corporation (LISC) applauds Senator Todd Young for introducing the Neighborhood Homes Investment Act. Far too many low-income communities in both rural and urban geographies are plagued by high rates of vacant housing, which depresses surrounding property values and destabilizes neighborhoods. The NHIA addresses this problem by offering tax credits that will cover a portion of the development costs, but only up to the gap between the costs of developing or rehabilitating the housing and the home’s market value. This will help to repopulate communities and increase the local tax base, while simultaneously creating construction jobs and providing homeownership opportunities for many first time homebuyer” said Matt Josephs, Senior Vice President for Policy, LISC.
The NHIA could lead to the revitalization of 500,000 homes and create $100 billion in development revenue over the next 10 years. NHIA will require that homes constructed or revitalized under the program must be sold to homeowners making less than 140 percent of the area median income. This ensures that improved housing directly benefits members of the communities targeted by the new tax credit. In addition, these credits are only eligible for houses constructed or revitalized in census tracts that meet certain minimum metrics related to median gross income, poverty rates, and home sale prices.
The credits would only be available after the homes have been completed and sold to a homeowner. NHIA targets neighborhoods that have poverty rates that are 130 percent or greater than the metro or state rate; have incomes that are 80 percent or less than area median income; and have home values that are below the metro or state median value.
The Neighborhood Homes Investment Act (NHIA) also is supported by the following organizations:
Center for Community Progress
Enterprise Community Partners
Habitat for Humanity
Housing Assistance Council
Housing Partnership Network
Local Initiatives Support Corporation
Mortgage Bankers Association
National Association of Affordable Housing Lenders
National Alliance Of Community Economic Development Associations
National Association of Hispanic Real Estate Professionals
National Association of Realtors
National Association of Real Estate Brokers
National Association of State and Local Equity Funds
National Association of the Remodeling Industry
National Council of State Housing Agencies
National Community Stabilization Trust
National Fair Housing Alliance
National Housing Conference
National NeighborWorks Association
Up for Growth Action
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