Neighborhood Homes Investment Act Picks Up Momentum

Kristin Siglin reports "recent actions in both the House and the Senate that show some real momentum behind the Neighborhood Homes Investment Act (NHIA)," in an article for Shelterforce magazine. 

As discussed in Planetizen coverage from July 2020, the NHIA would create a tax credit "to spur investment in modest single-family homes in distressed neighborhoods," as explained by Siglin here. 

According to Siglin, the bipartisan coalition behind the bill is motivated by a "lack of suitable housing supply and the problem of neighborhoods plagued by substandard housing and vacancy."

"In many communities across the country, the cost of renovating or building homes exceeds the price the homes can be sold for. This discourages mortgage lending in these communities, which limits the availability of homes that are affordable to first-time homebuyers."

The NHIA addresses that gap by creating a tax credit, allocated by states, that make up the difference between the cost of construction and the sales price of a home "if the home is sold to an owner-occupant who earns under 140 percent of the Area Median Income," according to Siglin. "It is modeled on the Low Income Housing Tax Credit (LIHTC), which is also allocated by the states and has a 30-year track record of spurring the construction of affordable apartments."

More details on the NHIA and the housing market realities that the legislation responds to are included in the source article.