Congress offers $10M tax breaks to convert offices—with no guarantee of affordable rents
H.R. 537 — INCREASE Housing Affordability Act · Filed by Mikie Sherrill (D-NJ) · 7 cosponsors · Introduced Jan 16, 2025 · Referred to committee
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What it does
This bill creates a federal tax credit worth up to 15% of conversion costs (capped at $200,000 per unit or $10 million per building) for developers who convert old office buildings into residential housing. It adds bonus credits (10–20%) if 25%+ of units serve low-income renters, and a 15% bonus if workers are paid prevailing wages. It also establishes a HUD advisory board to help states and cities identify conversion opportunities and streamline permitting.
Why we flagged it
Despite the housing-affordability framing in the title, the bill's primary mechanism is a tax credit for real-estate developers and investors converting office buildings. The affordable-housing bonus is optional and secondary; the core benefit flows to capital owners, not renters or low-income households.
What the text implies
- The 15% base credit applies to ALL conversions regardless of affordability outcomes; only 10–20% bonus uplift is tied to low-income occupancy, meaning most units may be market-rate and unaffordable to the populations the bill claims to serve.
- The $200,000-per-unit cap and $10M-per-building cap are generous relative to typical conversion costs, effectively subsidizing developer profit margins rather than reducing rents.
The full analysis lists 5 implications of this text.
Who stands to gain
commercial real-estate developers; office building owners and REITs; real-estate investment firms