Housing Committee Advances Tax Credit Proposal To Boost Building Redevelopment
A proposed tax credit could help convert vacant and underutilized buildings into modern housing and commercial spaces.
On Feb. 19, the House Housing Finance and Policy Committee heard HF 457, sponsored by Rep. Bobbie Harder (R- Henderson). The bill would create the Catalyzing Underutilized Buildings (CUB) Tax Credit, modeled after the Historic Structure Rehabilitation Tax Credit, to make redevelopment projects more financially feasible.
Many cities are working with developers to turn vacant and underutilized buildings into affordable housing. Examples of potential qualifying projects include converting schools, office buildings, and shopping centers into housing and/or modern commercial spaces.
St. Paul Mayor Melvin Carter testified in support of the bill and the League submitted a letter in support.
- Read the League’s letter supporting the HF 457 proposal (pdf).
- Watch a recording of the full committee hearing on HF 457.
The committee approved the bill and sent it to the House Taxes Committee where it awaits a hearing. The Senate bill is SF 768, sponsored by Sen. Zaynab Mohamed (DFL- Minneapolis), and is in the Senate Taxes Committee.
LMC staff take
The CUB Tax Credit could be a great tool for cities both in the metro and in Greater Minnesota to repurpose buildings to create more housing, mitigate against property tax shifts due to declining valuations, and support economic development. The bill has bipartisan support, and interested cities should reach out to their legislators to support the creation of a new redevelopment tool.
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