Legislation has been introduced to incentivize the construction of starter homes as well as provide up to $50,000 in down-payment assistance to first-time home buyers.
“My American Homeownership Opportunity Act will give Americans the opportunity to enter a housing market that’s more fair and affordable, giving them the chance to thrive and get closer to the American dream as generations before them have. Through tens of thousands in down-payment assistance for new home buyers and incentives for builders to create more starter homes, this legislation tackles the housing crisis head-on,” said Rep. Jimmy Gomez (D-Calif).
He noted that his bill comes after Vice President Kamala Harris put out a call for a comprehensive plan to make housing more affordable for Americans.
Gomez wants to establish the first-ever tax incentive specifically designed to increase the construction of new starter homes. He’s a member of the Ways and Means Committee, which has jurisdiction over tax incentives.
Under the proposal, builders of starter homes would receive 15% of the costs covered by a tax credit. In the case of a home being sold to a first-time home buyer, it would be 30%.
The total square footage of the home should not exceed 1,200 feet, and the sales price is not to exceed 80% of the area median home price.
Similar to the longtime low-income housing tax credit, which helps developers finance the construction of affordable rental housing, the starter-home construction credit would be allocated to state housing credit agencies to administer.
Read the text of his bill here.
Editor’s Note: This story has been corrected to say “the sales price is not to exceed 80% of the area median home price.”
