Sponsors (5)
The bill encourages reuse of vacant commercial buildings into housing through tax credits, bonuses, and federal technical support—likely increasing housing supply and downtown revitalization—but does so at the cost of federal revenue, added administrative complexity, and uneven benefits that may favor larger developers.
Local governments, housing agencies, and developers gain technical assistance, training, funding-source guidance, and feasibility/floor‑plan tools so conversions of vacant commercial space into housing proceed faster and are more likely to match local demand.
Property owners and developers converting office/commercial buildings into housing receive a nonrefundable tax credit equal to 15% of qualified conversion expenditures, reducing project costs and improving financial feasibility for conversions.
Low‑ and moderate‑income renters are likelier to gain affordable units because the conversion credit increases (by roughly 10–20%) when at least 25% of units are rent‑restricted at specified AMI levels.
American taxpayers face reduced federal revenue from the conversion tax credit and increased federal outlays from the authorized technical‑assistance program (authorized $5 million/year through 2029), which could add to the deficit or require offsets.
Taxpayers, owners, and local governments will face increased compliance costs and administrative burden because eligibility rules, certification, recapture provisions, and coordination with other credits are complex.
Smaller developers and property owners who cannot meet prevailing‑wage or rent‑restriction requirements may be excluded from bonus increases, concentrating benefits with larger firms able to satisfy the rules.
Based on analysis of 3 sections of legislative text.
Creates a federal tax credit (15% of qualified costs) for converting commercial buildings to housing, adds bonuses for affordability and prevailing wage, and funds HUD technical assistance.
Introduced January 16, 2025 by Mikie Sherrill · Last progress January 16, 2025
Creates a new federal tax credit to encourage converting commercial buildings into residential housing by paying 15% of eligible conversion costs, with limits per unit and per building and extra bonus credits for projects that provide affordable units or pay prevailing wages. Also directs HUD to create an advisory board to help state and local agencies speed up conversions and identify funding, and authorizes $5 million a year for that work from 2025–2029.