Revitalizing Downtowns and Main Streets Act

Bill Number: H.R. 2410
Origin Chamber: House
Congress: 119th Congress, Session 1
Policy Area: Taxation
Status: Introduced
Latest Action: 2025-03-27: Referred to the House Committee on Ways and Means.
Last Updated: 2026-06-30T08:06:56Z

AI-Generated Summary

Purpose

The "Revitalizing Downtowns and Main Streets Act" (H.R. 2410) aims to encourage the conversion of older non-residential buildings, such as vacant commercial properties, into affordable housing. By offering a federal tax credit, the legislation seeks to address housing shortages, revitalize urban downtowns and main streets, and support economic development in underserved areas.

Key Provisions

Tax Credit Overview: Introduces a new "affordable housing conversion credit" under Section 48F of the Internal Revenue Code (IRC). This provides a 20% credit on qualified conversion expenditures (capital costs for depreciable property used in the conversion) for eligible buildings placed in service after the bill's enactment.
Qualified Conversion Requirements:
The building must be an "eligible commercial building": originally placed in service at least 20 years prior and used as non-residential real property (e.g., offices or stores) immediately before conversion.
Conversion costs must exceed the greater of 50% of the building's adjusted basis (its tax value before conversion) or $100,000.
Costs must be incurred within a 2-year period ending when the building is placed in service (with exceptions for longer projects via progress expenditures).
Excludes acquisition costs and certain other expenses; coordinates with the existing rehabilitation credit (under IRC Section 47) by reducing amounts claimed under this new credit by 50% if overlapping.
Affordable Housing Standards:
The converted building must qualify as a "qualified affordable housing building," where at least 20% of residential units are rent-restricted (rents limited based on income) and reserved for households earning 80% or less of the area median income (AMI) for 30 years.
Rules for rent restrictions and income limits follow similar guidelines to the low-income housing tax credit (IRC Section 42), including handling cases where tenants' incomes rise or federal rental aid decreases.
Credit Allocation and Limits:
Credits are allocated by state housing credit agencies (similar to those administering low-income housing credits) based on a state-approved plan considering factors like financial need, affordable unit creation, proximity to jobs/transportation, local support, and economic revitalization.
National cap: $12 billion total, distributed to states by population; additional $3 billion for buildings in economically distressed areas (e.g., qualified census tracts, difficult development areas, or regions under the Public Works and Economic Development Act).
After December 31, 2028, unallocated funds from low-demand ("undersubscribed") states are reallocated to high-demand ("oversubscribed") states.
Agencies must enter binding agreements with developers and report allocations to the IRS; plans can require affordability beyond 30 years.
Enhanced Credits for Special Areas:
30% credit (instead of 20%) for buildings in qualified census tracts or difficult development areas, if 20% of units are for households at or below 60% AMI.
Up to 35% credit (capped at $2 million in expenditures) for historic preservation projects in rural areas involving certified rehabilitation of historic structures.
Other Rules:
Includes brownfields cleanup costs (contaminated sites) without depreciation limits.
Credit is transferable (under IRC Section 6418), allowing sale to other taxpayers for cash.
Recapture (repayment) of the credit if affordability requirements fail during the 30-year period.
Treasury Secretary to issue regulations on certifications, reporting, and program administration, including incentives for non-metropolitan areas.

Significant Changes to Existing Law

Adds a new IRC Section 48F, creating a dedicated investment tax credit for housing conversions, distinct from but coordinated with existing credits like the rehabilitation credit (Section 47) and clean energy credits (e.g., Section 48E).
Amends IRC Sections 46, 49, and 50 to include this credit in general business credit rules, basis adjustments, and progress expenditure allowances.
Makes the credit transferable, aligning it with recent expansions for other energy and housing incentives.
Introduces state allocation mechanisms modeled on the low-income housing tax credit (Section 42), but tailored to conversions with new criteria for economic revitalization and longer-term affordability options.

Potential Impacts

On Government Agencies: State housing agencies will handle allocations and monitoring, increasing administrative workload; the IRS and Treasury will need to develop guidance and oversee compliance/recapture, potentially straining resources initially.
On Citizens: Could increase affordable housing supply for low-income families (targeting 80% or less of AMI), reducing homelessness and housing costs in urban and rural areas; may indirectly boost local economies by repurposing vacant buildings near jobs and transit.
On International Relations: Minimal direct impact, as this is a domestic tax incentive focused on U.S. real estate.
Broader Effects: Likely to decrease federal tax revenue (estimated billions in credits) but promote private investment in housing; could accelerate revitalization of declining commercial areas, supporting small businesses and community development, though success depends on state allocation efficiency.

Main Stakeholders Affected

Developers and Taxpayers: Property owners and investors converting buildings, who benefit from the credit to offset costs.
Low-Income Households: Primary beneficiaries through access to rent-restricted units in repurposed buildings.
State and Local Governments: Housing credit agencies manage allocations; local communities gain from economic revitalization and reduced blight.
Federal Government: IRS enforces rules; Treasury designs implementation.
Real Estate and Construction Industries: Encourages projects in commercial-to-residential conversions, potentially creating jobs.
Non-Profit and Community Organizations: May partner on projects in distressed or rural areas.

Notable Legal, Constitutional, or Political Implications

Legal: Requires detailed Treasury regulations for implementation, including recapture and certification processes, to prevent abuse; builds on established tax credit frameworks (e.g., Sections 42 and 47) for consistency but introduces novel allocation for conversions, potentially leading to litigation over eligibility or state plans.
Constitutional: No major issues anticipated; as a voluntary tax incentive, it respects property rights and federal taxing power under Article I, without compelling state action beyond voluntary agency participation.
Political: Bipartisan sponsorship (over 20 cosponsors from both parties) signals broad support for addressing housing affordability and urban decay; could influence future tax policy by expanding transferable credits, but may face debate over costs amid budget concerns or equity in state allocations favoring populated areas.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Carey, Mike [R-OH-15]

Cosponsors (51)

Rep. Gomez, Jimmy [D-CA-34], Rep. Larson, John B. [D-CT-1], Rep. Fitzpatrick, Brian K. [R-PA-1], Rep. Sewell, Terri A. [D-AL-7], Rep. Tenney, Claudia [R-NY-24], Rep. Beyer, Donald S. [D-VA-8], Rep. Kustoff, David [R-TN-8], Rep. Chu, Judy [D-CA-28], Rep. Kelly, Mike [R-PA-16], Rep. Panetta, Jimmy [D-CA-19], Rep. Miller, Carol D. [R-WV-1], Rep. Davis, Danny K. [D-IL-7], Rep. Moore, Blake D. [R-UT-1], Rep. Evans, Dwight [D-PA-3], Rep. Malliotakis, Nicole [R-NY-11], Rep. Suozzi, Thomas R. [D-NY-3], Rep. Moran, Nathaniel [R-TX-1], Rep. Boyle, Brendan F. [D-PA-2], Rep. LaHood, Darin [R-IL-16], Rep. Sánchez, Linda T. [D-CA-38], Rep. Miller, Max L. [R-OH-7], Rep. Moore, Gwen [D-WI-4], Rep. Amodei, Mark E. [R-NV-2], Rep. Schneider, Bradley Scott [D-IL-10], Rep. Ciscomani, Juan [R-AZ-6], Rep. Horsford, Steven [D-NV-4], Rep. DelBene, Suzan K. [D-WA-1], Rep. Baumgartner, Michael [R-WA-5], Rep. Mann, Tracey [R-KS-1], Del. Moylan, James C. [R-GU-At Large], Del. Plaskett, Stacey E. [D-VI-At Large], Rep. Van Drew, Jefferson [R-NJ-2], Rep. Thompson, Mike [D-CA-4], Rep. Wittman, Robert J. [R-VA-1], Rep. Fields, Cleo [D-LA-6], Rep. Balderson, Troy [R-OH-12], Rep. Casten, Sean [D-IL-6], Rep. Valadao, David G. [R-CA-22], Rep. Lofgren, Zoe [D-CA-18], Rep. Miller-Meeks, Mariannette [R-IA-1], Rep. Hayes, Jahana [D-CT-5], Rep. Kim, Young [R-CA-40], Rep. Deluzio, Christopher R. [D-PA-17], Rep. Rutherford, John H. [R-FL-5], Rep. Ruiz, Raul [D-CA-25], Rep. Landsman, Greg [D-OH-1], Rep. Weber, Randy K. Sr. [R-TX-14], Rep. Barragán, Nanette Diaz [D-CA-44], Rep. Langworthy, Nicholas A. [R-NY-23], Rep. Guest, Michael [R-MS-3] and 1 more

Recent Actions

2025-03-27: Referred to the House Committee on Ways and Means.
2025-03-27: Introduced in House
2025-03-27: Introduced in House

Bill Versions

Revitalizing Downtowns and Main Streets Act — issued 2025-03-27 — PDF (18 pages)