Senator Debbie Stabenow (D-MI) and Rep. Jimmy Gomez (D-CA) introduced legislation that would provide a 20 percent tax credit for office conversion expenditures.
What This Proposal Means
Under the Revitalizing Downtowns Act, office buildings that are at least 25 years old could be converted into residential, retail or commercial use.
Why This Is Critical for Our Industry
Importantly, office to multifamily housing conversions would be eligible for this credit so long as:
- 20 percent of units are affordable at 80 percent of area median income; or
- the property is subject to an alternative affordable housing arrangement with a state or locality.
NMHC strongly supports adaptive reuse legislation as one solution that could help chip away at the nation’s supply and demand imbalance. As such, NMHC joined a coalition of real estate partners in sending a letter to Congress expressing our support and providing recommendations to improve the current legislation. These include:
- allowing the incentive to benefit the conversion of commercial buildings beyond office buildings;
- enabling REITs to utilize the incentive; and
- further promote the conversion of properties into affordable housing by enabling States to use tax-exempt Private Activity Bonds to reduce financing costs.
With the election only weeks away and time running out to legislate, it is unlikely that this bill will progress this Congress. However, we look forward to working with policymakers on this legislation next Congress.
- Sharon Wilson Géno Written Testimony on Behalf of the NMHC and NAA to the Senate Committee on Finance Hearing Entitled Tax Policy’s Role in Increasing Affordable Housing Supply for Working Families
- Middle-Income Housing Tax Credit (MIHTC) Fact Sheet
- IRS Proposed Regulations Real Estate Letter
- NMHC-NAA Senate Banking State of Housing Market Hearing Letter
- Real Estate Coalition Statement in Response to White House Announcement on Protecting Renters and Promoting Rental Affordability