SMACNA has increased its existing support on Capitol Hill for legislation designed to expand the conversion of underutilized commercial buildings for residential use. By endorsing and advocating for H.R. 9002, the Revitalizing Downtowns and Main Streets Act, introduced by Reps. Mike Carey (R-OH), Jimmy Gomez (D-CA), and 15 bipartisan original co-sponsors, SMACNA helps magnify the issue’s importance. This legislation addresses the growing demand for residential construction by creating a market-based tax incentive for converting older commercial buildings to residential use. Despite the increased demand for large-scale projects in the industrial sector, there continues to be a shrinking inventory in the residential space.
H.R. 9002 compliments existing real estate tax incentives passed at the state and local levels and represents a highly positive step forward in the effort to modernize U.S. real estate. It would create a new and temporary 20% tax credit for qualified property conversion expenditures, modeled after the historic rehabilitation credit. SMACNA has long championed more commercial property conversions and energy efficiency retrofits.
The key provisions of H.R. 9002 include:
- Qualified Conversion Credit— would create a new and temporary 20% tax credit for qualified property conversion expenditures, modeled after the historic rehabilitation credit.
- Tax Credit Cap— The total credit authority would be limited to $15 billion, allocated by state housing finance agencies based on feasibility and impact.
- Special Rural and Low-income Targeting— Larger credits would be available for projects in rural areas, low-income census tracts, and economically distressed areas.
- Stackable Tax Credit Option — The credit could be stacked to have a greater impact with other federal tax benefits, including LIHTC, rehabilitation credit, and Opportunity Zone benefits.
SMACNA believes that measures such as H.R. 9002 will go a long way in not only addressing the need for additional residential housing but also leveraging quality driven contractors employing the most skilled labor in revitalizing underutilized commercial space for community betterment.
Click here to read SMACNA’s letter of support for H.R. 9002.
