Indy Standard

U.S. Senators Todd Young and Mark Warner have reintroduced the Neighborhood Homes Investment Act (NHIA), a legislative proposal aimed at revitalizing housing in distressed neighborhoods across Indiana, Virginia, and other parts of the United States. The bill seeks to address the issue where private development is deterred due to renovation costs exceeding potential sale prices.

The NHIA proposes a federal tax credit designed to bridge this financial gap, making it economically viable for developers to invest in these areas. The legislation includes provisions to cap home sales prices, ensuring affordability remains accessible within these communities. Additionally, existing homeowners would receive support for renovations under this act.

Investors are expected to bear the risk as tax credits will only be granted post-rehabilitation and once properties are occupied by eligible homeowners. To maintain transparency and effectiveness, the Treasury Department is tasked with providing an annual report on the program's performance.

Senator Young emphasized the importance of restoring vibrant neighborhoods by directing private capital into low-income census tracts: “This legislation also includes important guardrails to ensure that tax incentives target the families that need it most.”

Senator Warner expressed his commitment alongside Senator Young in tackling housing challenges: “The Neighborhood Homes Investment Act will create new incentives for building and restoring affordable housing in areas that need it the most.”

The NHIA stipulates that homes must be sold to individuals earning less than 140% of the area median income, directly benefiting community members. Eligible houses must be located in census tracts meeting specific criteria related to income levels, poverty rates, and home values.

Tax credits are allocated through a competitive statewide process managed by each state's housing finance agency. Sponsors—developers or local governments—can use these credits to attract investment capital for their projects. Investors can claim these credits against federal taxes upon successful sale and occupancy of homes by qualifying buyers.

Representatives Mike Kelly and John Larson have introduced similar legislation in the House earlier this year. Senator Young initially introduced NHIA in 2023 with then-Senator Ben Cardin as part of ongoing efforts toward enhancing housing affordability.

Further details on this legislative proposal can be accessed via its full text online.