Neighborhood Homes Investment Act (NHIA)
The Neighborhood Homes Investment Act (NHIA), H.R. 3316, would revitalize distressed urban, suburban and rural neighborhoods with federal income tax credits, mobilizing private investment to build and substantially rehabilitate 500,000 homes for moderate- and middle-income homeowners over the next decade.
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. The lack of move-in ready homes makes it difficult to attract or retain homebuyers, causing property values to decline. The NHIA would break this downward spiral by bridging the gap between the cost of building or renovating homes and the price at which they can be sold, thus making renovation and new home construction possible. The NHIA would also help existing homeowners in these neighborhoods to rehabilitate their homes.
No current tax incentive meets this need. The NHIA is based on the successful Low Income Housing Tax Credit and New Markets Tax Credit, which support affordable rental housing and economic development, respectively, but are not designed to build or rehabilitate owner-occupied homes. Similarly, Opportunity Zones will support long-term business and real estate investment but not homeownership. Tax-exempt mortgage bonds and mortgage credit certificates assist homeowners by reducing mortgage payments, but they cannot cover the development financing gap. NHIA would complement these other incentives, not duplicate them.