INCREASE Housing Affordability Act

This bill uses a federal tax credit to help turn underused commercial buildings into homes, and directs support and technical help to state and local housing agencies to find and advance good conversion projects. It creates a 15% tax credit on qualified conversion costs, capped at $200,000 per new home and $10 million per building. If a building is mostly rentals and at least 25% of units are kept at affordable rents for local incomes, your credit and the caps go up by 10%–20% (tiers at about 100%, 80%, or 60% of the area’s median income). Projects that pay workers the local prevailing wage get another 15% boost. You usually claim the credit when the converted building is placed in service; long projects expected to take 2+ years can choose to count some costs during construction, with limits . You can’t also claim certain other federal housing or rehab tax credits for the same expenses.

Key points

• Who is affected: Building owners and developers converting commercial buildings into homes; construction workers and contractors; state and local housing agencies.
• What changes: A new 15% conversion tax credit with caps, plus extra credit for affordable units and for paying prevailing wages; no double‑counting with some other federal credits .
• When: Generally when the building is placed in service; big, multi‑year projects (2+ years) may opt to count some spending as they go, under special rules .