Russ Baldwin | April 14, 2022 | Comments 0
The legislation would help defray the cost of building or renovating homes, help existing homeowners stay in their homes
Washington, DC –– US Senator from Colorado, Michael Bennett, a member of the US Senate Finance Committee, has co-sponsored legislation led by US Senators Ben Cardin (D-Md.) and Rob Portman (R-Ohio) to build and revitalize homes in struggling neighborhoods in Colorado and across the country. Currently, private development is lacking in some urban and rural areas because the cost of buying and renovating houses is more than the value of the sale price of the houses. The Neighborhood Homes Investment Act (NHIA) would create a federal tax credit to bridge the gap between the cost of building or renovating a home in these areas and the price at which they can be sold. The NHIA would also help existing homeowners in these neighborhoods renovate and stay in their homes.
“We appreciate Senator Bennet’s commitment to seeking solutions to the crisis of inadequate housing supply, particularly in his leadership with Senators Cardin and Portman in co-sponsoring the Neighborhood Housing Investment Act. Over the years, Total Concept has built and rehabilitated more than 1,000 homes for families in these rural areas. NHIA would help be a catalyst to spur other public-private partnerships to address the need for affordable housing in Colorado and across the country,” said Steven Cordova, executive director of Total Concept. Total Concept is a non-profit organization serving families with a wide range of housing services in rural and southeastern Colorado.
The NHIA could lead to the revitalization of 500,000 homes and generate $100 billion in development revenue over the next 10 years. About 22% of the country’s metropolitan areas and 25% of non-metropolitan areas would be eligible for NHIA investments. The NHIA would target neighborhoods that have poverty rates of 130% or more than the metro or state rate; have incomes less than or equal to 80% of the median income of the region; and have home values below the metro or state median value. The NHIA would require homes built or revitalized under the program to be sold to homeowners earning less than 140% of the area’s median income. Thus, the improvement of the habitat directly benefits the members of the communities targeted by the new tax credit.
The investors, not the government, would bear the risk, as the credits would not be received until the rehabilitation was completed and the property was occupied by an eligible owner. The Treasury Department would be required to provide an annual report on program performance.
The maximum amount of credit would be the lesser of 35% of total development costs (property acquisition plus cost of construction and/or rehabilitation) or 80% of the national median selling price of the house. NHIA tax credits would be awarded to project proponents – developers, lenders or local governments – through a statewide competitive application process administered by the NHIA housing finance agency. each state. Sponsors would use the credits to raise investment capital for their projects, and investors could claim the credits against their federal income taxes when homes are sold and occupied by eligible buyers. State agencies would receive an annual allocation of $6 per capita or $8 million, whichever is greater.
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