Adaptive Reuse Bill Re-introduced in the U.S. House of Representatives

U.S. Representatives Mike Carey (R-Ohio-15) and Jimmy Gomez (D-Calif.-34) reintroduced the bipartisan Revitalizing Downtowns and Main Streets Act to incentivize the conversion of existing vacant and underutilized commercial properties into new housing.

According to Pew Research, 49% of Americans lack affordable housing in their communities, and the U.S. would need to build an estimated 4.3 million apartments by 2035 in order to meet the demand for rental housing.

However, with an estimated 30% of Americans’ workdays now remote, post-pandemic, many commercial properties remain vacant, resulting in a chilling effect on commercial real estate. One study estimated a $413 billion reduction in commercial real estate asset values due to the remote work trend.

The Act provides a federal tax credit, modeled after the Historic Preservation Tax Credit, to facilitate the conversion of older, underutilized office and other commercial buildings into residential housing. The credit amount for any taxable year would be equal to 20% of the qualified conversion expenditures with respect to a qualified converted building. The Bill ensures that converted properties will increase the supply of affordable housing by requiring that during the 30-year period following conversion, no less than 20% of the residential units created are reserved for individuals with incomes at 80% or less of area’s median income.

If enacted, this Bill could enable Ohio developers to revitalize vacant buildings and build new housing in communities across the State. Read more about the Revitalizing Downtowns and Main Streets Act here.