I
119THCONGRESS
1
STSESSION H. R. 2410
To amend the Internal Revenue Code of 1986 to provide an investment
credit for converting non-residential buildings to affordable housing.
IN THE HOUSE OF REPRESENTATIVES
MARCH27, 2025
Mr. C
AREY(for himself, Mr. GOMEZ, Mr. LARSONof Connecticut, Mr.
F
ITZPATRICK, Ms. SEWELL, Ms. TENNEY, Mr. BEYER, Mr. KUSTOFF,
Ms. C
HU, Mr. KELLYof Pennsylvania, Mr. PANETTA, Mrs. MILLERof
West Virginia, Mr. D
AVISof Illinois, Mr. MOOREof Utah, Mr. EVANS
of Pennsylvania, Ms. M
ALLIOTAKIS, Mr. SUOZZI, Mr. MORAN, Mr. BOYLE
of Pennsylvania, Mr. L
AHOOD, Ms. SA´NCHEZ, Mr. MILLERof Ohio, Ms.
M
OOREof Wisconsin, Mr. AMODEIof Nevada, Mr. SCHNEIDER, Mr.
C
ISCOMANI, Mr. HORSFORD, and Ms. DELBENE) introduced the following
bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
an investment credit for converting non-residential build-
ings to affordable housing.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Revitalizing Down-4
towns and Main Streets Act’’. 5
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SEC. 2. INVESTMENT CREDIT FOR CONVERSION OF NON- 1
RESIDENTIAL BUILDINGS TO AFFORDABLE 2
HOUSING. 3
(a) I
NGENERAL.—Subpart E of part IV of sub-4
chapter A of chapter 1 of subtitle A of the Internal Rev-5
enue Code of 1986 is amended by inserting after section 6
48E the following new section: 7
‘‘SEC. 48F. AFFORDABLE HOUSING CONVERSION CREDIT. 8
‘‘(a) A
LLOWANCE OFCREDIT.—For purposes of sec-9
tion 46, the affordable housing conversion credit for any 10
taxable year is an amount equal to 20 percent of the quali-11
fied conversion expenditures of the taxpayer with respect 12
to a qualified affordable housing building placed in service 13
by the taxpayer during the taxable year. 14
‘‘(b) Q
UALIFIEDCONVERSIONEXPENDITURES.—For 15
purposes of this section— 16
‘‘(1) I
N GENERAL.—The term ‘qualified conver-17
sion expenditures’ means, with respect to any quali-18
fied affordable housing building, any amount prop-19
erly chargeable to capital account— 20
‘‘(A) for property for which depreciation is 21
allowable under section 168, and 22
‘‘(B) in connection with the qualified con-23
version of a qualified affordable housing build-24
ing. 25
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‘‘(2) CERTAIN EXPENDITURES NOT IN -1
CLUDED.—The term ‘qualified conversion expendi-2
tures’ does not include— 3
‘‘(A) L
IMITATION ON PERIOD OF CONVER -4
SION.—Except as provided in subsection (f), 5
any amount paid or incurred other than during 6
the 2-year period ending on the date on which 7
the taxpayer places the qualified affordable 8
housing building in service. 9
‘‘(B) C
OST OF ACQUISITION.—The cost of 10
acquiring any building or interest therein. 11
‘‘(3) S
PECIAL RULE FOR BROWNFIELDS .— 12
Paragraph (1)(A) shall not apply with respect to any 13
expenditure for clean up of qualifying brownfield 14
property (as defined in section 512(b)(19)). 15
‘‘(4) C
OORDINATION WITH REHABILITATION 16
CREDIT.—In the case of any qualified conversion ex-17
penditures which are taken into account for pur-18
poses of determining the rehabilitation credit under 19
section 47, the amount of such expenditures taken 20
into account under this section (determined without 21
regard to this paragraph) shall be reduced by 50 22
percent. 23
‘‘(c) Q
UALIFIEDCONVERSION.—For purposes of this 24
section— 25
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‘‘(1) IN GENERAL.—The term ‘qualified conver-1
sion’ means the conversion of an eligible commercial 2
building into a qualified affordable housing building 3
if the qualified conversion expenditures of the tax-4
payer with respect to such conversion exceed the 5
greater of— 6
‘‘(A) an amount equal to 50 percent of the 7
adjusted basis of such building (determined im-8
mediately prior to such conversion), or 9
‘‘(B) $100,000. 10
‘‘(2) E
LIGIBLE COMMERCIAL BUILDING .—The 11
term ‘eligible commercial building’ means any build-12
ing which, with respect to any conversion— 13
‘‘(A) was originally placed in service not 14
less than 20 years before the date on which 15
such conversion begins, and 16
‘‘(B) immediately prior to such conversion, 17
was nonresidential real property (as defined in 18
section 168). 19
‘‘(d) Q
UALIFIEDAFFORDABLE HOUSINGBUILD-20
ING.—For purposes of this section— 21
‘‘(1) I
N GENERAL.—The term ‘qualified afford-22
able housing building’ means any residential building 23
if during the 30-year period beginning on the date 24
on which such building is placed in service by the 25
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taxpayer, not less than 20 percent of the residential 1
units in the building are both rent-restricted and re-2
served for individuals whose income is 80 percent or 3
less of the area median income. 4
‘‘(2) R
ENT AND INCOME LIMITATION .—For 5
purposes of this subsection, rules similar to the rules 6
of subsection (g) of section 42 shall apply to deter-7
mine whether a unit is rent-restricted, treatment of 8
units occupied by individuals whose incomes rise 9
above the limit, and the treatment of units where 10
Federal rental assistance is reduced as tenant’s in-11
come increases. 12
‘‘(e) L
IMITATION ONAGGREGATECREDITALLOW-13
ABLE.— 14
‘‘(1) C
REDIT MAY NOT EXCEED CREDIT 15
AMOUNT ALLOCATED TO BUILDING .— 16
‘‘(A) I
N GENERAL.—The amount of the 17
credit determined under this section with re-18
spect to any building shall not exceed the quali-19
fied conversion credit dollar amount allocated to 20
such building under this subsection by the 21
housing credit agency of the State in which 22
such building is located. 23
‘‘(B) T
IME FOR MAKING ALLOCATION .— 24
Except in the case of an allocation which meets 25
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the requirements of subparagraph (C), an allo-1
cation shall be taken into account under sub-2
paragraph (A) only if it is made not later than 3
the close of the calendar year in which the 4
building is placed in service. 5
‘‘(C) E
XCEPTION WHERE BINDING COM -6
MITMENT.—An allocation meets the require-7
ments of this subparagraph if there is a binding 8
commitment (not later than the close of the cal-9
endar year in which the building is placed in 10
service) by the housing credit agency to allocate 11
a specified housing credit dollar amount to such 12
building beginning in a later taxable year. 13
‘‘(2) S
TATE LIMITATION.— 14
‘‘(A) I
N GENERAL.—The aggregate quali-15
fied conversion credit dollar amount which a 16
housing credit agency of any State may allocate 17
is the sum of— 18
‘‘(i) the amount which bears the same 19
ratio to the national qualified conversion 20
credit limitation as— 21
‘‘(I) the population of such State, 22
bears to 23
‘‘(II) the population of all States, 24
plus 25
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‘‘(ii) the sum of any amounts deter-1
mined under subparagraph (C). 2
‘‘(B) N
ATIONAL QUALIFIED CONVERSION 3
CREDIT LIMITATION.—The national qualified 4
conversion credit limitation is $12,000,000,000. 5
‘‘(C) A
DDITIONAL AMOUNTS PROVIDED 6
FOR CERTAIN BUILDINGS IN ECONOMICALLY 7
DISTRESSED AREAS.— 8
‘‘(i) I
N GENERAL.—For purposes of 9
subparagraph (A)(ii), in any case in 10
which— 11
‘‘(I) the housing credit agency of 12
a State allocates an amount to a 13
building which is located in an eco-14
nomically distressed area, and 15
‘‘(II) the Secretary subsequently 16
designates such amount for purposes 17
of this paragraph, 18
the amount determined under this para-19
graph with respect to such building shall 20
be the amount originally allocated by the 21
housing credit agency of the State under 22
clause (i). 23
‘‘(ii) L
IMITATION.—The aggregate 24
amount which the Secretary may designate 25
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under clause (i)(II) shall not exceed 1
$3,000,000,000. 2
‘‘(iii) M
ANNER OF DESIGNATION .— 3
Not later than 120 days after the date of 4
the enactment of this section, the Sec-5
retary shall establish a program for deter-6
mining the designation of amounts that 7
may be designated under this subpara-8
graph. 9
‘‘(D) R
EALLOCATION OF CERTAIN 10
AMOUNTS.— 11
‘‘(i) I
N GENERAL.—Notwithstanding 12
subparagraph (A)— 13
‘‘(I) no amount may be allocated 14
under paragraph (1) by a housing 15
credit agency of an undersubscribed 16
State after December 31, 2028, and 17
‘‘(II) the dollar amount deter-18
mined under subparagraph (A) with 19
respect to any oversubscribed State 20
after such date shall be increased by 21
such State’s share of the reallocation 22
amount. 23
‘‘(ii) S
TATE SHARE.—For purposes of 24
clause (i), an oversubscribed State’s share 25
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of the reallocation amount is the amount 1
which bears the same ratio to the realloca-2
tion amount as— 3
‘‘(I) the population of such State, 4
bears to 5
‘‘(II) the population of all over-6
subscribed States. 7
‘‘(iii) D
EFINITIONS.—For purposes of 8
this subparagraph— 9
‘‘(I) U
NDERSUBSCRIBED 10
STATE.—The term ‘undersubscribed 11
State’ means any State that is not an 12
oversubscribed State. 13
‘‘(II) O
VERSUBSCRIBED 14
STATE.—The term ‘oversubscribed 15
State’ means any State the housing 16
credit agency of which has allocated 17
all of the qualified conversion credit 18
dollar amount which may be allocated 19
by it before the date described in 20
clause (i)(I). 21
‘‘(III) R
EALLOCATION 22
AMOUNT.—The term ‘reallocation 23
amount’ means the sum of the 24
amounts described in subparagraph 25
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(A) which have not been allocated by 1
undersubscribed States before the 2
date described in clause (i)(I). 3
‘‘(3) M
ANNER OF ALLOCATION .— 4
‘‘(A) P
LAN FOR ALLOCATION.— 5
‘‘(i) I
N GENERAL.—Notwithstanding 6
any other provision of this section, the 7
qualified conversion credit dollar amount 8
with respect to any building shall be zero 9
unless such amount was allocated pursuant 10
to a conversion credit allocation plan of the 11
housing credit agency which is approved by 12
the governmental unit (in accordance with 13
rules similar to the rules of section 14
147(f)(2) (other than subparagraph (B)(ii) 15
thereof)) of which such agency is a part. 16
‘‘(ii) C
ONVERSION CREDIT ALLOCA -17
TION PLAN.—For purposes of this sub-18
paragraph, the term ‘conversion credit allo-19
cation plan’ means a plan— 20
‘‘(I) which sets selection criteria 21
for allocations, taking into account— 22
‘‘(aa) whether the credit is 23
needed to assure the financial 24
feasibility of the conversion, 25
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‘‘(bb) the extent to which 1
the conversion results in the cre-2
ation of affordable housing, 3
‘‘(cc) the extent to which the 4
conversion results in the creation 5
of housing near transportation, 6
employment, and commercial op-7
portunities, 8
‘‘(dd) the extent to which 9
the conversion will support small 10
businesses and economic revital-11
ization in the surrounding area, 12
‘‘(ee) the degree of local gov-13
ernment support for the conver-14
sion, and 15
‘‘(ff) the readiness of the 16
building for a qualified conver-17
sion, and 18
‘‘(II) which provides a procedure 19
that the agency (or an agent or other 20
private contractor of such agency) will 21
follow in monitoring for noncompli-22
ance with the requirements of sub-23
section (d) and in notifying the Inter-24
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nal Revenue Service of such non-1
compliance. 2
‘‘(B) B
INDING ALLOCATION AGREEMENTS ; 3
REPORTING.—In making allocations of qualified 4
conversion credit dollar amounts, each housing 5
credit agency shall— 6
‘‘(i) enter into binding agreements 7
with taxpayers for the allocation of quali-8
fied conversion credit dollar amounts, 9
which agreements shall specify the amount 10
of qualified conversion credit dollar amount 11
allocated to the building and the terms for 12
any modifications or withdrawal of such al-13
location, and 14
‘‘(ii) report to the Secretary, at such 15
time and in such manner as the Secretary 16
may require, the amount of allocations 17
made with respect to any building. 18
‘‘(C) S
TATE EXTENDED USE REQUIRE -19
MENTS PERMITTED PAST 30 YEARS .—For pur-20
poses of this paragraph, a housing credit agen-21
cy’s plan shall not fail to be treated as a con-22
version credit allocation plan merely because it 23
includes, and nothing in this section shall be 24
construed to limit a binding allocation agree-25
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ment from including, affordability or rent re-1
striction requirements with respect to the build-2
ing that apply for a longer period than the 30- 3
year period described in subsections (d) and 4
(g)(1)(B). 5
‘‘(4) D
EFINITIONS AND OTHER RULES .— 6
‘‘(A) H
OUSING CREDIT AGENCY .—The 7
term ‘housing credit agency’ means, with re-8
spect to any State, the housing credit agency 9
authorized under section 42(h)(8) or such other 10
agency as authorized by the State for purposes 11
of this section. 12
‘‘(B) E
CONOMICALLY DISTRESSED AREA .— 13
The term ‘economically distressed area’ means 14
any area which— 15
‘‘(i) has been designated as a qualified 16
census tract under section 42(d)(5)(B)(ii) 17
or as a difficult development area under 18
section 42(d)(5)(B)(iii), or 19
‘‘(ii) meets the requirement of section 20
301(a)(3) of the Public Works and Eco-21
nomic Development Act of 1965. 22
‘‘(C) S
TATE.—The term ‘State’ includes a 23
possession of the United States. 24
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‘‘(D) OTHER RULES.—Rules similar to the 1
rules of subparagraphs (A) and (B) of section 2
42(h)(7) shall apply for purposes of this sec-3
tion. 4
‘‘(f) P
ROGRESSEXPENDITURES.—If the Secretary 5
determines, on the basis of architectural plans and speci-6
fications that a qualified conversion is reasonably expected 7
to exceed 2 years, rules similar to the rules of section 8
47(d) shall apply with respect to such conversion for pur-9
poses of this section. 10
‘‘(g) S
PECIALRULES FORCERTAINAREAS.— 11
‘‘(1) Q
UALIFIED CENSUS TRACTS AND DIF -12
FICULT DEVELOPMENT AREAS .—In the case of a 13
qualified affordable housing building— 14
‘‘(A) which is located in any area which is 15
designated as a qualified census tract under 16
section 42(d)(5)(B)(ii) or as a difficult develop-17
ment area under section 42(d)(5)(B)(iii)), and 18
‘‘(B) with respect to which during 30-year 19
period beginning on the date on which such 20
building is placed in service by the taxpayer, 21
not less than 20 percent of the residential units 22
in the building are both rent-restricted and re-23
served for individuals whose income is 60 per-24
cent or less of the area median income, 25
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subsection (a) shall be applied by substituting ‘30 1
percent’ for ‘20 percent’. 2
‘‘(2) H
ISTORIC PRESERVATION IN RURAL 3
AREAS.— 4
‘‘(A) I
N GENERAL.—In the case of a quali-5
fied affordable housing building which is in a 6
rural area and is part of an historic preserva-7
tion project, the taxpayer may elect to sub-8
stitute ‘35 percent’ for ‘20 percent’ under sub-9
section (a) with respect to such portion of the 10
aggregate qualified conversion expenditures 11
taken into account under such subsection as 12
does not exceed $2,000,000. 13
‘‘(B) D
EFINITIONS.—For purposes of this 14
paragraph— 15
‘‘(i) R
URAL AREA.—The term ‘rural 16
area’ shall have the meaning given such 17
term under section 1393(a)(2). 18
‘‘(ii) H
ISTORIC PRESERVATION 19
PROJECT.—The term ‘historic preservation 20
project’ means a qualified conversion which 21
involves the certified rehabilitation of a 22
certified historic structure. Whether con-23
version of a certified historic structure in-24
volves certified rehabilitation shall be de-25
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termined under rules similar to the rules of 1
section 47(c)(2)(C). 2
‘‘(h) R
EGULATIONS.—The Secretary shall issue such 3
regulations or other guidance as may be necessary or ap-4
propriate to carry out the purposes of this section, includ-5
ing regulations or other guidance— 6
‘‘(1) providing for the recapture of the credit 7
determined under subsection (a) if the qualified af-8
fordable housing building ceases to be a qualified af-9
fordable housing building during the 30-year period 10
beginning on the date that such building is placed 11
in service by the taxpayer, 12
‘‘(2) detailing any certifications required from 13
the taxpayer or any housing credit agency of a 14
State, 15
‘‘(3) with respect to the application of sub-16
section (b)(4), 17
‘‘(4) with respect to information reporting on 18
allocations of qualified conversion credit dollar 19
amounts, 20
‘‘(5) providing rules for making a determination 21
as to whether an area is described in subsection 22
(e)(4)(B), and 23
‘‘(6) which encourages housing credit agencies 24
to allocate, to the extent practicable, qualified con-25
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version credit dollar amounts to non-metropolitan 1
counties within a State in proportion to the non- 2
metropolitan population of the State, but only to the 3
extent it is demonstrated within such non-metropoli-4
tan counties that there are sufficient qualified con-5
version expenditures to warrant such allocations.’’. 6
(b) T
RANSFERABILITY OF CREDIT.—Section 7
6418(f)(1)(A) of such Code is amended by adding at the 8
end the following new clause: 9
‘‘(xii) The affordable housing conver-10
sion credit determined under section 11
48F.’’. 12
(c) C
ONFORMINGAMENDMENTS.— 13
(1) Section 46 of such Code is amended in 14
paragraph (5) by striking ‘‘and’’ at the end, in para-15
graph (6) by striking the period at the end and in-16
serting ‘‘, and’’, and by adding at the end the fol-17
lowing new paragraph: 18
‘‘(7) the affordable housing conversion credit.’’. 19
(2) Section 49(a)(1)(C) of such Code is amend-20
ed by striking ‘‘and’’ at the end of clause (v), in 21
clause (vi) by striking the period at the end and in-22
serting ‘‘, and’’, and by adding at the end the follow 23
new clause: 24
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‘‘(vii) the basis of any property which 1
is being converted as part of a qualified 2
conversion under section 48F.’’. 3
(3) Section 50(a)(2)(E) of such Code is amend-4
ed by striking ‘‘or 48E(e)’’ and inserting ‘‘48E(e), 5
or 48F(f)’’. 6
(4) The table of sections for subpart E of part 7
IV of subchapter A of chapter 1 of subtitle A of 8
such Code is amended by adding at the end the fol-9
lowing new item: 10
‘‘Sec. 48F. Affordable housing conversion credit.’’.
(d) EFFECTIVEDATE.—The amendments made by 11
this section shall apply to qualified affordable housing 12
buildings (as defined in section 48F of the Internal Rev-13
enue Code of 1986, as added by this section) placed in 14
service after the date of the enactment of this Act. 15
Æ
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