The implementation of SB2638 could significantly affect state housing policies by incentivizing more investments in energy efficiency improvements within the affordable housing sector. By providing additional tax credits for rehabilitation projects that meet specific energy performance criteria, the bill aims to lower the overall energy consumption and costs associated with such properties, thereby enhancing the viability and sustainability of affordable housing options. This could stimulate a shift toward energy-efficient renovations, which are both economically and environmentally beneficial.
Summary
SB2638, known as the Energy Efficiency for Affordable Housing Act, aims to enhance the Low-Income Housing Credit under the Internal Revenue Code of 1986 for buildings that meet advanced energy performance standards. The bill introduces an increased credit for rehabilitation expenditures used on existing buildings that achieve enhanced energy performance, which is defined through certain energy standards set forth by the Secretary of Energy. Specifically, the bill allows for rehabilitation expenditures to be recognized at 130% of the actual expenditures for qualifying buildings, with a further increase to 160% for buildings located in high-cost areas.
Contention
Notable points of contention surrounding SB2638 include debates over the adequacy and stringency of the energy performance standards as evaluated by state and federal agencies. Opponents argue that the bill might impose overly burdensome requirements on developers, which could complicate compliance and deter participation in the program. Furthermore, there is concern regarding the equitable distribution of benefits from the increased credit, prompting discussions on how effectively the bill will reach low-income housing projects in need.