WASHINGTON, D.C. – Today, U.S. Rep. Mike Carey (R-Ohio-15), a member of the Ways & Means Committee, introduced the Housing Opportunities and Preservation Enhancement (HOPE) Act to create new tax incentives that encourage the renovation of older, existing rental properties to preserve them as affordable housing.
“We were able to expand and make permanent the Low-Income Housing Tax Credit through the Working Families Tax Cuts, and this legislation builds on that success by preserving more affordable housing for the families who need it most,” said Rep. Mike Carey. “The Housing Opportunities and Preservation Enhancement Act will help rehabilitate aging rental properties, expand access to quality affordable housing, and encourage partnerships that put residents first. By modernizing the tax code, we can ensure more hardworking families have access to safe, affordable places to call home.”
“Congress has begun to build real momentum around addressing America’s housing crisis,” said Michael Ruane, President of National CORE. “The proposed HOPE Act recognizes that we can’t solve that challenge by building alone. We also have to preserve the affordable homes we already have, and this bill gives us an innovative new way to do exactly that.”
“The HOPE Act would provide a critical tool for nonprofit developers like National Church Residences to preserve existing affordable housing by enabling additional private investment and equity partnerships from individual investors,” said Matthew Rule, Senior Vice President, Housing Development and Asset Management for National Church Residences. “We view the HOPE Act as a natural complement to the LIHTC program and an essential component of a comprehensive affordable housing strategy, and we strongly endorse its passage.”
“I applaud Congressman Mike Carey for his leadership in introducing and championing the Housing Opportunities and Preservation Enhancement or HOPE Act,” said Michael Novogradac, Managing Partner of Novogradac & Company. “While Congress’ permanent expansion of the low-income housing tax credit last year is historic and critical for affordable rental housing, especially for new construction, the nation’s need for preservation outstrips these expanded resources. This bill provides nonprofit owners of rental housing a flexible financing tool targeted to individual investors to address the growing national need to preserve the nation’s affordable rental housing stock in a way that would complement, not replace or substitute, the historic Housing Credit expansion.”
Background:
- This bill amends the Internal Revenue Code to encourage the purchase and major renovation of existing residential rental properties that are at least 15 years old.
- To qualify for these new tax incentives, a property must undergo significant rehabilitation of at least $20,000 per unit and be owned by partnerships involving non-profit, government, or tribal entities.
- The legislation targets affordable housing by requiring at least 70% of the units to be rent-restricted for families making 80% or less of the local area median income.
- It ensures long-term preservation through a 10-year right of first refusal for qualified buyers at below-market prices while cutting IRS red tape by exempting investors from standard passive activity loss and profit-motive restrictions.
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