H.R.537 - Incentivizing New Conversions to Residential Entities to Accelerate Supply and Expand Housing Affordability Act; INCREASE Housing Affordability Act (119th Congress)
Summary
H.R.537, also known as the INCREASE Housing Affordability Act, aims to incentivize the conversion of commercial buildings into residential units by providing tax credits and support to state and local housing agencies. The bill amends the Internal Revenue Code of 1986 to establish a commercial-to-residential credit, offering a 15% tax credit on qualified conversion expenditures, subject to certain limitations. It also establishes a Commercial to Residential Conversion Advisory Board to provide technical assistance and best practices to state and local housing agencies.
The Act includes bonus credits for affordable housing and projects that meet prevailing wage requirements. The advisory board will focus on identifying feasible conversion opportunities, expediting regulatory processes, and identifying funding sources.
Ultimately, the bill seeks to increase the supply of affordable housing by repurposing underutilized commercial buildings.
Expected Effects
The likely effect of H.R.537 is an increase in the number of residential units, particularly in urban areas with a surplus of commercial space. The tax credits and advisory board support could make conversion projects more financially viable for developers.
This could lead to lower housing costs and increased housing availability, especially for low- and moderate-income individuals. The prevailing wage requirements could also lead to better wages for construction workers involved in these projects.
However, the effectiveness of the bill will depend on factors such as the availability of suitable commercial buildings, the complexity of local regulations, and the overall demand for housing in specific areas.
Potential Benefits
- Increased Housing Supply: The tax credits incentivize developers to convert commercial buildings into residential units, increasing the overall housing supply.
- Affordable Housing: The bill includes bonus credits for projects that include affordable housing units, targeting housing for low- and moderate-income individuals.
- Economic Development: Converting underutilized commercial buildings can revitalize urban areas and create new economic opportunities.
- Job Creation: The conversion projects will create jobs in the construction and related industries.
- Efficient Use of Existing Infrastructure: Reusing existing buildings is more sustainable than new construction and utilizes existing infrastructure.
Potential Disadvantages
- Cost to Taxpayers: The tax credits will reduce government revenue, potentially increasing the tax burden on other taxpayers or leading to cuts in other programs.
- Complexity of Regulations: The bill introduces new regulations and requirements, which could be complex and difficult for developers to navigate.
- Potential for Abuse: The tax credits could be subject to abuse if not properly monitored and enforced.
- Limited Impact: The bill may not have a significant impact on the overall housing market, especially in areas with high land costs or strict zoning regulations.
- Unintended Consequences: Conversions may lead to increased density and strain on local infrastructure in some areas.
Constitutional Alignment
H.R.537 aligns with the general welfare clause of the Constitution (Preamble), which empowers Congress to promote the well-being of the nation. The bill's focus on housing affordability and economic development falls within this broad mandate.
Congress's power to tax and spend, as outlined in Article I, Section 8, allows it to create tax credits and fund advisory boards to achieve policy goals. The bill does not appear to infringe on any specific constitutional rights or limitations.
However, the implementation of the bill must be consistent with principles of equal protection and due process to ensure fairness and avoid discrimination.
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).