Support for Preservation Tax Credits
CCH is dedicated to not only building and managing new affordable housing units but also to the preservation and renovation of existing properties. In alignment with our mission of providing quality, affordable homes, CCH supports AB 1911 designed to create an Affordable Housing Preservation Tax Credit (AHPTC) to incentivize the preservation of existing affordable apartment properties and mobile-home parks. If passed, AB1911 would provide for the preservation of tens of thousands of affordable housing units at risk of being converted to market rate and displacing low-income tenants.
According to Roadmap Home 2030, California needs to build 1.2 million additional affordable homes over the next ten years to meet the needs of low-income households. While increasing the supply of new and available affordable rental homes is critical, we also must preserve existing affordable housing so the need for more affordable housing doesn’t continue to grow.
Between 1997 and 2020, California lost 18,043 affordable rental homes as affordability restrictions expired. In the near future, another 30,102 affordable rental homes are at risk of being converted to market-rate rentals. Many neighborhoods currently have a stock of unrestricted housing, including mobile-home parks, that historically had been affordable. When considering affordability, protecting these homes from future market-rate pressures is equally important.
With a growing homeless population, California cannot afford to let tens of thousands of affordable housing units disappear. A targeted tax credit would encourage property owners to sell to affordable housing developers committed to long-term affordability. This would enable thousands of lower-income households to remain in their homes and avoid being displaced.
As drafted, the AHPTC would provide a 50 percent tax credit (up to $20,000 per unit and $1 million per transaction) against state and federal capital gains owed by the seller of an existing building or mobile park if they sell to a nonprofit entity that will commit to operating the property as low-income, affordable housing for 55 years.
The AHPTC would be used by experienced affordable housing organizations to keep at-risk and naturally-affordable units affordable. Over a five year period, a $500 million initial allocation of credits would lead to the preservation of roughly 25,000 affordable units, at a cost of $20,000 each.
Consider joining with CCH and lending your support to AB 1911. This bill will incentivize the preservation of existing affordable apartment properties and mobile-home parks, help keep vulnerable families housed, prevent homelessness, and maintain our valuable affordable housing stock.