‘Revitalizing Downtown Act’ Seeks Fed Tax Credits For Business To Residential Conversions
In an effort to revitalize the downtown business and urban districts of cities across the United States, Senators Debbie Stabenow (D–MI) and Gary Peters (D–MI), along with Representatives Jimmy Gomez (D-CA), Dan Kildee (D-MI), and John Larson (D-CT) today introduced the Revitalizing Downtowns Act, which would establish a new federal tax credit to support the conversion of obsolete and excess office spaces into residential or mixed-use properties.
The proposed office conversion tax credit comes as communities are seeing a rise in remote work and a diminished need for conventional office space in downtown areas – largely as a result of changing work patterns set in motion by the COVID-19 pandemic and evolving technology.
“As our workplaces change because of the COVID-19 crisis, we will see more unused buildings in our downtowns. Converting these buildings to residential and mixed-use properties will benefit families and our cities,” said Senator Stabenow. “Our bill will help with this transition, support the economic growth of our cities, help small businesses and provide people affordable places to live.”
In support of the Revitalizing Downtowns Act, a diverse coalition of 37 national and regional economic development organizations established Revitalize Our Cities (ROC). This growing coalition of chambers of commerce, downtown alliances, and urban partnerships across twenty states and the District of Columbia is committed to reenergizing American cities, strengthening the U.S. economy, and repurposing antiquated and under-occupied office structures with homes and businesses.
“Converting obsolete office buildings into residential or mixed-use developments represents a critical opportunity to bolster the economic promise of American cities while expanding affordable housing opportunities, supporting small businesses, and creating more resilient city centers,” said David Downey, President and CEO of the International Downtown Association and member of the Revitalize Our Cities Coalition. “While the economics of conversions is challenging and requires significant private investment, supportive tax policy can create incentives and make it financially feasible. We encourage Congress to pass this crucial legislation quickly.”
Modeled after the Historic Tax Credit, the Revitalizing Downtowns Act would provide a credit equal to 20% of the Qualified Conversion Expenses in converting obsolete office buildings into residential, institutional, hotel, or mixed-use properties. An obsolete office structure is a building that is at least 25 years old, and the bill requires 20% of the units in a residential conversion to be dedicated to affordable housing.
“The Revitalizing Downtowns Act is the key to replacing vacancy with vibrancy, bringing life back to the metropolitan centers that serve as cultural hubs and help fuel the American economy,” said former DC Mayor Anthony Williams, who currently serves as the CEO and Executive Director of the Federal City Council and member of the Revitalize Our Cities Coalition. “Mixed-income housing redevelopments supported by this legislation will provide new opportunities for many American families, generate tax revenue for cities, and stimulate small businesses.”
The Revitalize Our Cities Coalition is made up of more than thirty economic development organizations across 20 states and the District of Columbia. Members include:
National
- International Downtown Association
- International Economic Development Council
- Accelerator for America
Regional and Local
- Metro Hartford Association
- California Downtown Association
- SPUR (Regional Planning and Policy Organization for San Francisco Region)
- Real Estate Board of New York City (REBNY)
- Center City Association of Los Angeles
- Central Houston Inc.
- Downtown Dallas Inc.
- Downtown Sacramento Partnership
- Indy Chamber
- Greater Louisville Inc. (GLI)
- Downtown Cleveland Alliance
- Greater Cleveland Partnership
- City of Akron/Greater Akron (OH) Chamber
- City of Dayton
- Center City Cincinnati Development Corporation (3CDC)
- Downtown Denver Partnership
- Pittsburgh Downtown Partnership
- Greater Pittsburgh Chamber of Commerce
- Greater Portland Inc.
- Downtown Seattle Association
- Chicagoland Chamber of Commerce
- Central Loop Alliance (Chicago)
- Downtown Partnership of Baltimore
- Minneapolis Downtown Council
- Minneapolis Regional Chamber
- MKE Downtown (Milwaukee)
- Federal City Council and DC BID (Washington, DC)
- Greater St. Louis Inc
- Newark Downtown Alliance
- REV Birmingham / Birmingham Business Alliance
- Downtown Little Rock Partnership
- City of Grand Rapids / Downtown Grand Rapids Inc.
- City of Detroit / Downtown Detroit Partnership / Detroit Regional Chamber
- City of Lansing