WASHINGTON, D.C. – Today, U.S. Reps. Mike Carey (R-Ohio-15) and Jimmy Gomez (D-Calif.-34), both members of the House Ways and Means Committee, reintroduced their bipartisan Revitalizing Downtowns and Main Streets Act. The bill incentivizes the conversion of existing vacant and underutilized commercial properties into new housing.
“High costs of living have driven up housing prices for working families and it is cutting into budgets during kitchen table discussions,” Rep. Carey said. “There is a solution right in front of us: add existing buildings to the housing supply. Right now, vacant commercial and office space is sitting unused, and converting these properties into housing is often so expensive it isn’t worth doing. This bipartisan bill will allow communities to expand their supply of affordable housing by upgrading existing buildings, allowing American downtowns and main streets to thrive with new investments.”
“The housing crisis is squeezing family budgets, while empty commercial and office buildings sit unused in downtowns and in suburban and rural communities,” Rep. Gomez said. “Our bipartisan bill converts these empty commercial buildings into homes families can afford—a smart way to fix both problems. We need a housing boom like we haven’t seen since World War II, so this legislation is a no-brainer. We’re helping people live where they work by filling vacant real estate and increasing our housing supply.”
BACKGROUND:
According to Pew Research, 49% of Americans lack affordable housing in their communities, and the US would need to build an estimated 4.3 million apartments by 2035 to meet the demand for rental housing.
At the same time, commercial properties are sitting vacant. Following the COVID-19 pandemic, an estimated 30% of Americans’ workdays are remote. A chilling effect on commercial real estate has followed, with one study estimating a $413 billion reduction in commercial real estate asset values due to the remote work trend.
Specifically, the Revitalizing Downtowns and Main Streets Act provides a federal tax credit, modeled after the Historic Preservation Tax Credit, to facilitate the conversion of older, underutilized office and other commercial buildings into residential housing.
The credit amount for any taxable year would be equal to 20% of the qualified conversion expenditures with respect to a qualified converted building. The bill ensures converted properties will increase the supply of affordable housing by requiring that during the 30-year period following conversion, no less than 20% of the residential units in the buildings is reserved for individuals with incomes at 80% or less of area’s median income.
This bill is supported by the following groups: The Real Estate Roundtable, American Hotel and Lodging Association, American Land Title Association, American Resort Development Association, American Seniors Housing Association, CCIM Institute, ICSC, Institute of Real Estate Management, Latino Hotel Association, Mortgage Bankers Association, NAIOP, the Commercial Real Estate Development Association, Nareit, National Apartment Association, National Association of Home Builders, National Association of Realtors, National Multifamily Housing Council, National Rental Home Council, Council of Development Finance Agencies, the Sheet Metal and Air Conditioning Contractors’ National Association, Up for Growth Action, Main Street America, and International Downtowns Association.
A letter of support from several supporting groups can be found here.
A one-pager of the bill can be found here.
Full text of the bill can be found here.
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