Frank Adelmann Manufactured Housing Community Sustainability Act of 2026
- Bill Number
- H.R. 8988
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-05-21: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-06-24T08:09:34Z
AI-Generated Summary
Purpose of the Legislation This bill aims to preserve affordable housing by offering a federal tax incentive for owners to sell manufactured home communities to residents or qualifying nonprofits, ensuring long-term affordability and resident control.
Key Provisions Outlined
- Findings: The legislation cites statistics showing that over 22 million people live in HUD-code manufactured homes, which represent about 6% of U.S. housing stock. It notes that these homes are disproportionately occupied by low-income households (median income $35,000), are often located in rural areas, and provide lower-cost housing. Key issues include residents owning homes but not the land, leading to risks of rent hikes or evictions. The findings highlight benefits of resident-owned cooperatives, such as lower annual site fee increases (0.9% vs. 5.9% in commercial parks) and existing state protections in 19 states.
- Tax Credit Creation: Adds new Internal Revenue Code section 45BB, providing a business credit equal to 75% of the qualified gain from selling real property for use as a manufactured home community.
- Qualified gain requires the property to be sold to a qualified cooperative or nonprofit, owned by the seller for at least 2 years prior, and transferred with a binding covenant for use as a manufactured home community for at least 50 years (or the maximum allowed by state law).
- Qualified entities are defined as cooperatives or nonprofits with membership limited to residents (and possibly a tax-exempt organization), governed democratically by an elected board with equitable voting.
- Manufactured home is defined as a transportable structure meeting specific size and safety standards under federal law.
- Special Rules: Both seller and buyer must execute and record an affidavit confirming compliance; the seller must attach it to their tax return.
- Recapture Tax: Imposes a 20% tax on the buyer (based on net proceeds) for violating the 50-year use covenant.
- Integration: The credit is added to the general business credit under section 38 and treated as a business-related credit under section 196.
- Effective Date: Applies to taxable years beginning after December 31, 2026.
Significant Changes to Existing Law Introduced The bill creates an entirely new tax credit (section 45BB) in the Internal Revenue Code, which did not previously exist for this purpose. It modifies sections 38 and 196 to incorporate the credit and adds a corresponding item to the table of sections. No other major alterations to existing statutes are made.
Potential Impacts
- On government agencies: The IRS would administer the credit, including processing affidavits, verifying eligibility, and enforcing the recapture tax; the Department of Housing and Urban Development is referenced indirectly through manufactured home standards.
- On citizens: Could encourage sales that allow low-income manufactured home owners to gain land ownership through cooperatives, potentially stabilizing housing costs and promoting wealth-building in rural and low-income areas.
- On international relations: None identified in the bill.
Main Stakeholders Affected
- Sellers of manufactured home communities (eligible for the tax credit).
- Residents of manufactured home communities and resident-owned cooperatives.
- Nonprofit organizations involved in affordable housing preservation.
- State and local governments (due to interactions with existing state laws on covenants and sales notifications).
- The IRS (for tax administration and enforcement).
Notable Legal, Constitutional, or Political Implications The bill introduces a targeted tax incentive tied to long-term land-use covenants, which may raise questions about enforceability across states with varying laws on such restrictions. It does not appear to implicate constitutional issues such as takings or equal protection, as participation is voluntary. The measure focuses on tax policy to support housing preservation without direct federal spending or regulatory mandates.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (5)
Rep. Pappas, Chris [D-NH-1], Rep. Bonamici, Suzanne [D-OR-1], Rep. Tlaib, Rashida [D-MI-12], Rep. Khanna, Ro [D-CA-17], Rep. Pingree, Chellie [D-ME-1]
Recent Actions
- 2026-05-21: Referred to the House Committee on Ways and Means.
- 2026-05-21: Introduced in House
- 2026-05-21: Introduced in House
Bill Versions
- Frank Adelmann Manufactured Housing Community Sustainability Act of 2026 — issued 2026-05-21 — PDF (13 pages)