Neighborhood Homes Investment Act
The Neighborhood Homes Investment Act (NHIA) is proposed federal legislation that would create a tax credit to spur investment in homeownership in weak markets. Low- and middle-income neighborhoods in cities and towns throughout Ohio struggle with vacant and abandoned properties. As a result, our neighborhoods have property values too low to support the costs necessary to renovate these homes, to build new homes in their place when they are demolished, or for existing homeowners to leverage the equity needed to make critical repairs to their homes.
The Neighborhood Homes Investment Act would offer an innovative solution to this market failure by providing a tax credit to cover the gap in construction and rehabilitation costs of homes for owner-occupancy. The new tax credits would be administered by state agencies through annual competitive application rounds and would only be available for modestly priced homes in communities characterized by high poverty, low incomes, and low home values.
To learn more about the bill, and look at the detailed mapping tool for what census tracts will qualify, visit: https://neighborhoodhomesinvestmentact.org/
September 29, 2023: Sign-on letter for Senator Vance
The Ohio CDC Association and our members have supported the passage of the NHIA for several years, and OCDCA members have successfully added several new bipartisan cosponsors to the bill. Your advocacy is important to ensure this bill can become law, and Ohio's communities have access to this powerful new tool to spur responsible investment. OCDCA hosted a webinar to explain more about the bill, and to share how OCDCA members can advocate for their members of Congress to express support.
Click here to view the Webinar
We are encouraging Senator Vance to sign on as a co-sponsor to the bill, and need OCDCA members to show their overwhelming support for this legislation. We have drafted a sign-on letter for Ohio housing and economic development advocates which is available for review here.
November 4, 2021: Neighborhood Homes Investment Act included in House Build Back Better Package
The Neighborhood Homes Credit (aka Neighborhood Homes Investment Act) is included in the House version of the Build Back Better Act. The bill would establish the Neighborhood Homes Credit (NHC) to promote new construction or substantial rehabilitation of affordable, owner‐occupied housing located in distressed neighborhoods. The NHC would allow project sponsors to claim a credit to cover the difference between the costs to rehabilitate a home in a distressed neighborhood, or build a new home on an empty lot, and the price for which the home is sold. As with the Housing Credit, the program would be overseen by the Treasury Department and Internal Revenue Service, which would allocate credit authority to each state. Each state would be required to designate a single agency to award the credits, and each agency would be expected to develop a Qualified Allocation Plan for their NHC program. Each state’s NHC allocation would be equal to its state population times $3 (roughly $35 million for Ohio), with a small-state minimum of $4 million, except for in 2025 when the cap would be $6 times the state population ($70 million for Ohio) or $8 million. In years 2023 to 2025, those amounts would be adjusted upward for inflation. The program would sunset after 2025.
Thank you to all the members that signed on in support to Senator Sherrod Brown. We’ll be in touch for additional advocacy.
April 30, 2021: Neighborhood Homes Investment Act Introduced in House
From Enterprise…On March 23, Representative Brian Higgins (D-NY-26) introduced the Neighborhood Homes Investment Act (NHIA) in the House (H.R. 2143). Identical companion legislation was introduced by Senators Rob Portman (R-OH) and Ben Cardin (D-MD) in the Senate late January (S. 98). The NHIA, modeled after the successful Housing Credit and New Markets Tax Credit (NMTC), would create a federal tax credit to encourage investment in distressed urban, suburban, and rural neighborhoods that face a “value gap” – where the cost of rehabilitating or building a home is greater than the post-construction value of that home. The program would target communities facing the greatest need – those with high poverty rates, low median family incomes, and low home values – and could revitalize an estimated 500,000 homes, creating $100 billion in development revenue over the next 10 years.
The NHIA, which was first introduced last Congress in both the Senate, S. 4073, and the House, H.R. 3316, was also included in the House passed, H.R. 2, the Moving Forward Act. More recently, the Biden administration called for $20 billion to incentivize the building or rehabilitation of over 500,000 homes for low- and middle-income homebuyers through the NHIA through its American Jobs Plan. Enterprise applauds Representative Higgins, other members of Congress, and the Biden administration for their championship of this critical legislation, which could improve property values, increase family wealth, and decrease blight and abandonment in distressed communities.
January 28, 2021: Senator Portman Reintroduces Tax Credit Bill to Encourage Revitalization of Distressed Homes
The Neighborhood Homes Investment Act (NHIA) was introduced on January 28 by Senators Rob Portman (R-OH) and Ben Cardin (D-MD), and co-sponsored by Senators Tim Scott (R-SC), Todd Young (R-IN), Chris Coons (D-DE), and Sherrod Brown (D-OH). NHIA would encourage private investment in an estimated 500,000 homes that currently cannot be developed or rehabilitated because the costs to do so exceed the value of the home. The tax credit supports development of homes in rural communities struggling with the costs of new construction, as well as the rehabilitation of homes in distressed urban communities.
December 9, 2020: OCDCA Hosts Webinar on the Neighborhood Home Investment Act
On December 8th, OCDCA hosted The Neighborhood Homes Investment Act Movement: Bipartisan Tax Credit to Invest in Communities. We're glad to have had Matt Josephs from LISC, Kim Cutcher of LISC Toledo, and Kate Monter Durban of CHN Housing Partners present with our Executive Director, Nate Coffman.
Here is the link to the recording. You will need to enter your name and email to view the recording. View Matt Josephs's slides or Kate Monter Durban's fact sheet about Cleveland.
Mapping Tool & More Info
There are more eligible areas than the four maps shown in the presentation yesterday. Some rural areas and small towns are eligible too. View the interactive census track map tool. Note, you'll want to zoom in to get a real sense of the map.
You can also learn more at the Neighborhood Homes Coalition website.
What You Can Do Now
We are thrilled to say that both Ohio Senators support the bill. Senator Portman is the lead sponsor and Senator Brown is a co-sponsor. We are also excited that five of Ohio's house delegation co-sponsored this bipartisan bill.
To date, Representatives Joyce Beatty (D-3), Marcy Kaptur (D-9), Tim Ryan (D-13), Steve Stivers (R-15), and Anthony Gonzalez (R-16) have co-sponsored this bill.
But there is still work to do! We want to make sure our other Ohio Congressional Representatives support this bill. Also, this bill will "start over" in January with the new Congress, so we'll want to make sure the current supporters introduce and co-sponsor the bill again.
If your Representative has co-sponsored the bill, it'd be great to thank them. If your Representative hasn't co-sponsored the bill, please reach out to them.
Here is a sample letter from the Neighborhood Home Coalition that you can use.
Ohio Congressional Representatives who haven't co-sponsored the bill:
Rep. Steve Chabot (R-1)
Rep. Brad Wenstrup (R-2)
Rep. Jim Jordan (R-4)
Rep. Bob Latta (R-5)
Rep. Bill Johnson (R-6)
Rep. Bob Gibbs (R-7)
Rep. Warren Davidson (R-8)
Rep. Mike Turner (R-10)
Rep. Marcia Fudge (D-11)
Rep. Troy Balderson (R-12)
Rep. Dave Joyce (R-14)
Look up your U.S. House Representative here.
OCDCA will be sending updates and calls to action in the upcoming months and year on this legislation.
Background in case you missed the webinar
The Neighborhood Homes Investment Act calls for the creation of a new federal tax credit that will produce new equity investment dollars for the development and renovation of 1-4 family housing in distressed urban, suburban, and rural neighborhoods.
In communities throughout the Ohio, neighborhood revitalization is being stymied by the "value gap" - the situation in which the cost of rehabilitating or building a home is greater than the post-construction value of the home.
The value gap contributes to three interrelated conditions that challenge urban prosperity: blight, vacancy, and abandonment; conversion of homeownership neighborhoods to absentee landlord neighborhoods; and racial inequity.
It's estimated that each $1 billion in NHIA investment would result in the following impacts nationwide:
25,000 homes built or rehabilitated
$4.25 billion of total development activity
33,393 jobs in construction and construction-related industries
$1.82 billion in wages and salaries
$1.25 billion in federal, state, and local tax revenues and fees (strike last two points if need room)
In addition, this tax credit will improve property values, increase family wealth, decrease blight and abandonment in distressed neighborhoods, and create more and better options for shelter- all of which indirectly enhance multiple determinants of health and well-being in America's residential communities. Learn more at neighborhoodhomesinvestmentact.org.