INCREASE Housing Affordability Act

Tax Credits for Conversions: Taxpayers can receive a credit equal to 15 percent of qualified conversion expenditures, with limits of $200,000 per new residential housing unit and $10,000,000 per building (Section 2(b)).

Increased Affordable Housing Supply: A bonus credit is available for converted buildings that are primarily used for rental and meet specific rent and income requirements (Section 2(b)(d)(1)).

Support for Lower Income Individuals: The bill provides higher bonus credit percentages for buildings where at least 25 percent of units are rent-restricted and occupied by individuals earning 100 percent or less of the area median income, 80 percent or less, or 60 percent or less (Section 2(b)(d)(1)(A)).

Wage Protections: A bonus credit of 15 percent is available if the taxpayer certifies that all laborers or mechanics were paid wages at rates not less than the prevailing rates for similar work in the locality (Section 2(b)(d)(2)).

Technical and Logistical Support for Localities: An advisory board will provide State and local housing agencies with help in identifying feasible candidates, conducting feasibility analyses, and expediting regulatory and permitting processes (Section 3(c)).

Exclusions on Certain Costs: The tax credit does not cover the cost of acquiring a building or expenditures related to the enlargement of an existing building (Section 2(b)(e)(2)(B)).

Restrictions on Tax-Exempt Property: Expenditures for the conversion of a building that is part of tax-exempt use property are excluded from the credit, with specific exceptions for eligible educational institutions (Section 2(b)(e)(2)(B)(iv)).

Lease Term Limitations: Expenditures made by a lessee are not included if the remaining term of the lease is less than the recovery period determined under section 168(c) (Section 2(b)(e)(2)(B)(v)).