More lawmakers have signed on to support the Neighborhood Homes Investment Act, bringing the total to 100 members of the House of Representatives and 24 senators.
“The affordable housing crisis has touched every community in the country. The widespread, bipartisan support for the Neighborhood Homes Investment Act shows the desire for new tools to address the affordable housing shortage, invest in our neighborhoods, and create opportunities for first-time homeownership, especially among those who are historically left out,” said Rep. Brian Higgins (D-N.Y.), the author of the House legislation, in a statement. “Together with the skilled and diverse group of advocates in the Neighborhood Homes Coalition, we will continue to push for the bill’s passage this year.”
H.R. 2143 and S. 98 aim to produce or rehab 500,000 starter homes in struggling communities over the next decade through a tax credit covering a portion of the development costs.
Building on the low-income housing tax credit (LIHTC), the new Neighborhood Homes credit would be administered by state agencies and awarded to sponsors through competitive rounds. States would be allocated the credits based on population–$6 per capita or a small state minimum of $8 million.
For new homes developed or substantially rehabilitated for sale, the tax credits would cover the gap between development costs and net sales proceeds, up to 35% of the lessor of eligible costs or 80% of the national median home sales price, and the credit could only be claimed after the construction is completed and an eligible homeowner occupies the home.
Eligible purchasers must have incomes at or below 140% of the area/state median income.
“It is critical that we get the Neighborhood Homes Investment Act over the finish line,” said Sen. Rob Portman (R-Ohio), the lead Republican sponsor of the Senate legislation.
“This bill would give us a critical new tool in the fight against rising housing costs, drive investment for more homes in the communities that need it most, and work alongside other powerful tools such as the New Markets Tax Credit, Opportunity Zones, and the LIHTC to unleash investment and revitalize communities across the nation.”
Thirty-six national organizations are backing the proposal through their involvement in the Neighborhood Homes Coalition. The supporters include the National Association of Affordable Housing Lenders, Local Initiatives Support Corp., Mortgage Bankers Association, Enterprise, National Association of Realtors, and the National Council of State Housing Agencies. The coalition recently sent a letter to House and Senate leaders calling on them to act on the legislation before the end of the year.