H.R.2854 - Neighborhood Homes Investment Act (119th Congress)
Summary
H.R.2854, the Neighborhood Homes Investment Act, seeks to amend the Internal Revenue Code of 1986 by establishing a tax credit for neighborhood revitalization. The bill aims to address the housing shortage, particularly in low-income and distressed communities, by incentivizing the construction and rehabilitation of affordable homes. It introduces a new tax credit, the 'neighborhood homes credit,' for qualified residences sold in affordable sales within designated census tracts.
Expected Effects
The bill's passage would likely lead to increased investment in housing development and rehabilitation in distressed areas. This would be achieved through tax credits that close the value gap between development costs and sale prices. The Act also sets specific criteria for qualified residences, homeowners, and projects, along with guidelines for state neighborhood homes credit agencies to administer the program.
Potential Benefits
- Increased Homeownership: By making homes more affordable in distressed areas, the bill could increase homeownership rates.
- Neighborhood Revitalization: The focus on distressed communities could lead to overall revitalization and increased stability.
- Job Creation: Construction and rehabilitation projects would generate jobs in these communities.
- Wealth Building: Homeownership is a primary source of household wealth, particularly for low-income families.
- Attracts Investment: The tax credit could attract private investment into underserved areas.
Potential Disadvantages
- Complexity: The tax credit program is complex, with numerous requirements and definitions, potentially leading to administrative burdens and compliance challenges.
- Potential for Abuse: The tax credit system could be subject to fraud or misuse if not properly monitored and regulated.
- Limited Scope: The credit is limited by state neighborhood homes credit ceilings, potentially restricting the number of projects that can benefit.
- Market Distortion: The tax credit could distort the housing market by artificially inflating prices or favoring certain developers.
- Unintended Consequences: Focus on specific census tracts might neglect other areas in need of housing assistance.
Constitutional Alignment
The bill appears to align with the Constitution's general welfare clause (Preamble). Congress has the power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States (Article I, Section 8, Clause 1). The bill's use of tax credits to incentivize housing development could be seen as a means to promote the general welfare by addressing housing shortages and revitalizing distressed communities. The bill also mandates consistency with the Fair Housing Act of 1968, supporting equal protection principles.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).