Revitalizing Downtowns and the Impact on Commercial Real Estate
The Revitalizing Downtowns and Main Streets Act (RDMA), introduced by Representatives Jimmy Gomez (CA-34) and Mike Carey (OH-15), aims to solve two problems: empty commercial spaces and the housing shortage.
For more information, read the press release here.
What You Need to Know
In our post-COVID-19 world, many commercial spaces are underutilized.
RDMA seeks to revitalize downtown areas by converting those underutilized commercial properties into residential housing.
While this normal is challenging, a new federal tax incentive could make it easier.
Modeled after the Historical Preservation Tax Credit, this incentive could cover eligible conversion expenses.
For example, the bill proposes a federal tax credit of 20% to 35% for qualified conversion expenditures.
At least 20% of the new housing units must be affordable for people earning 80% or less of the area's average income for at least 30 years.
In low-income and hard-to-develop areas, the units must be affordable for people earning 60% or less of the area's average income.
Units designated as affordable will have rent capped at 30% of the tenant's income.
How It Impacts You
Available tax credits could help offset conversion costs, but this must be balanced with the affordable housing requirements and overall project profitability.
We hope to see further commitment to revitalizing downtowns with other incentive opportunities. Ones that would encourage businesses to make the investments needed to make downtown dynamic spaces.
The RDMA offers an opportunity to try to revitalize downtown by focusing on turning office spaces into housing.
This could lead to an upswing of mixed-use development spaces.
As well as more foot traffic with people living in downtown housing, helping local business growth and property values.
Stay Connected
The Revitalizing Downtowns and Main Streets Act promotes turning unused commercial spaces into housing to improve downtown areas and the housing crisis.
Stay connected with BOMA on the Frontline for more updates relevant to members.
