Neighborhood Homes Investment Act would give incentive to revitalize low-income areas
Legislation moving through the house and senate aims to get rid of dilapidated and abandoned homes and improve low-income neighborhoods.
The Neighborhood Homes Investment Act would give a tax credit incentive to private investors to build new or renovate homes in run down neighborhoods.
Congressman Bill Johnson has signed his support of the act.
"I come from a rural community myself and so I'm very familiar with the struggle that rural and urban areas face," he said. "Places like Youngstown and even further south in the rural parts of our state often times they get overlooked."
The tax credit would cover the difference between the cost it took to build the house and the appraisal value.
Home Financing Example:
Property acquisition Construction or rehabilitation: $50,000
Total development cost: $200,000
Less: Sales price $250,000
Value gap = Neighborhood Homes tax credit amount $50,000
The legislation would help the Youngstown Neighborhood Development Corporation continue its projects. They've renovated 200 homes to try and bring people back to the city.
"We see it as something that would help ignite the real estate market in a lot of our communities that are in such dire need of quality housing," Ian Benistion, Executive Director of YNDC said.
Another organization that would use the tax credit is Habitat for Humanity of Mahoning Valley. David Redig, the Executive Director said it would allow them to continue their mission of providing a decent, affordable place for people to live.
"I've seen the need for not only new home construction, but also rehabs," Redig said. “We have a large housing inventory, so for us, it would change what we do.”
Sponsors that want to build the homes must raise initial capital from investors and use it to finance home construction and substantial rehabilitation. Sponsors can be developers, lenders, and local governments. The homes must be finished and sold to a new owner within 5 years for the sponsor to get the credit.
The homes can only be sold to low, moderate and middle income families that make less than 140% of area median income.
If this act passes, it is estimated to build or rehabilitate 500,000 homes over the next 10 years across the nation.
