Creates an affordable housing business tax credit as well as eliminate sales tax on any materials purchased for use in the renovation of affordable rental housing.
Impact
In addition to the introduction of the tax credit, H7396 proposes to exempt sales tax on materials purchased for renovating affordable rental housing. This exemption is a strategic move to lower renovation costs, thereby encouraging businesses to engage in updating and maintaining rental units aimed at low-income residents. Furthermore, the bill stipulates that income derived from the sale of deed-restricted affordable property will also be exempt from taxation, thereby enhancing the financial viability of these investments.
Summary
House Bill H7396, introduced by Representatives Place, Hopkins, Santucci, Fascia, and Chippendale, seeks to amend the Business Corporation Tax by establishing a tax credit specifically aimed at promoting affordable housing initiatives. The bill aims to attract business firms to invest in low-income rental housing by allowing them to apply a state tax credit equivalent to 50% of the federal low-income housing tax credit available for similar activities. This measure is intended to bolster the production of affordable housing and address the ongoing housing crisis impacting low-income families in the state.
Contention
Key points of contention surrounding H7396 include concerns about its financial implications for state tax revenues, as the introduction of tax credits and exemptions may reduce immediate tax inflows. Critics also argue that while the intent of the bill is noble, without adequate oversight and regulation, it could lead to exploitation by developers who may prioritize profits over genuinely assisting low-income families. Proponents counter that the structured tax incentives are necessary to stimulate the needed growth in affordable housing supply and help address the housing shortage effectively.
Creates business tax credit for, eliminates sale tax on, eliminates income tax on the sale of, and creates a 10 year tax valuation freeze on newly renovated affordable housing.
Amends the definition of affordable housing to create separate categories for housing using private or state financing as opposed to financing from the federal government.
Amends the definition of affordable housing to create separate categories for housing using private or state financing as opposed to financing from the federal government.
Requires the town of Tiverton to require a minimum number of affordable housing units if there is less than ten percent (10%) of affordable housing in the town.
Requires the town of Tiverton to require a minimum number of affordable housing units if there is less than ten percent (10%) of affordable housing in the town.
Grants a right of first offer to qualified nonprofits for the purchase of certain multi-family residential properties at market prices, within a reasonable period of time to promote the creation and preservation of affordable rental housing.
Allows the town of Tiverton to allow a half (1/2) credit for affordable housing for manufactured homes in age restricted communities in conformance with all zoning laws and/or ordinance of the town.
Establishes a program operated by the Rhode Island housing and mortgage finance corporation called the "housing land bank" to create affordable housing in RI with the authority to buy, receive, and hold real property for housing development.