U.S. Sen. Martin Heinrich
U.S. SENATE News:
WASHINGTON, D.C. — U.S. Sen. Martin Heinrich (D-N.M.) introduced the New Homes Tax Credit Act, legislation that will provide tax credits to incentivize new investments and additional resources for single-family home construction and renovations for working families.
As Chairman of the U.S. Joint Economic Committee (JEC), Heinrich released a report on housing supply in America, which found that underbuilding, restrictive zoning policies, and home financing hurdles have caused the supply of starter homes to shrink and prices to rise. High interest rates and mangled supply chains have also contributed to increased home prices.
Heinrich’s legislation will address the lack of housing inventory for individuals and families whose incomes are up to 120 percent of the area median income (AMI), particularly including in areas where middle-income families have historically been priced out. In Albuquerque, Santa Fe, and Las Cruces, New Mexico, for example, this added housing inventory would benefit families with annual incomes of up to $103,680, $109,800, and $78,960, respectively.
“Every New Mexican who’s looked at buying a home knows: housing prices are too high. To solve that, we need to build and renovate more homes. It’s that simple,” Heinrich said. “My New Homes Tax Credit Act will help boost home construction and renovation for middle-income New Mexicans, growing our local economies and giving more working families a shot at success.”
“Democrats are focused on attacking the cost of living, and with rents and home prices climbing every year, the key to solving our housing crisis is to build, build, build. That’s what this bill is all about,” Wyden said. “The housing crisis is no longer just about big cities like Portland, it’s all over Oregon and the entire country – urban centers, suburban communities, even a lot of rural areas. Congress needs to look at every available solution that’ll get more housing built so that families don’t have to break the bank to pay the rent every month.”
“The housing shortage crisis has been brutal for communities across the country. In Vermont, we’ll need at least 30,000 more homes by 2030. To address this crisis, we must find new and innovative ways to encourage new construction and renovations of starter homes for lower and moderate-income communities,” Welch said. “Everyone deserves to have a safe and affordable place to live.”
The New Homes Tax Credit (NHTC) would be administered under the Community Development Financial Institutions (CDFI) Fund. The CDFI Fund certifies Housing Development Entities (HDEs), which can be CDFIs, government and quasi-governmental entities, or non-profits. Following certification, HDEs will use the capital raised from exchanging their NHTCs with investors to provide funds for construction companies that build or renovate single-family homes.
The New Homes Tax Credit Act is cosponsored by U.S. Senators Ron Wyden (D-Ore.), Peter Welch (D-Vt.), and Chris Van Hollen (D-Md.).
The legislation is supported by the Mortgage Bankers Association, National Association of Home Builders, National Association of Realtors, Housing New Mexico, Homewise, Yes Housing, Inc., and Strong Towns Albuquerque.
“With a nationwide shortage of roughly 1.5 million housing units, we must increase the supply of housing to ease the nation’s housing affordability crisis,” said Chairman Carl Harris of the National Association of Home Builders. “NAHB is pleased to support the Affordable Housing Expansion Tax Credit, which would create a new federal program to help finance the construction or renovation of affordable, entry-level housing. With nearly half of U.S. households unable to afford a $250,000 home, we must adopt policies to make homeownership more accessible and increase production of entry-level housing.”
“Home ownership is still very much part of the American Dream. The New Homes Tax Credit Act, sponsored by Senator Martin Heinrich, is an innovative way to offset construction costs and lower those costs that are passed on to the homebuyers. This makes the purchase of a home much more feasible than what the current market costs allow. Many more Americans will be to attain their goal of owning a home to raise their families.” said President/CEO Chris Baca of Yes Housing, Inc., a New Mexico based non-profit affordable housing developer.
The legislation is also supported by Strong Towns Albuquerque, which stated, “This Act represents an innovative approach to encourage private investment in the development and renovation of entry-level homes for low- and moderate-income families. By establishing a tax credit for investments in housing development entities that provide affordable housing, this Act promotes the construction and renovation of homes for first-time buyers and those from underserved communities. It directly aligns with our commitment to fostering equitable, sustainable urban growth by expanding access to safe and affordable housing for individuals and families whose incomes do not exceed 120 percent of the area median income (AMI).”
A summary of the bill is here. A tool to determine AMI’s across the country is here. The text of the bill is here.