[Congressional Record Volume 143, Number 36 (Wednesday, March 19, 1997)]
[Extensions of Remarks]
[Pages E521-E522]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     THE INTRODUCTION OF THE HISTORIC HOMEOWNERSHIP ASSISTANCE ACT

                                 ______
                                 

                         HON. E. CLAY SHAW, JR.

                               of florida

                    in the house of representatives

                       Wednesday, March 19, 1997

  Mr. SHAW. Mr. Speaker, all across America, in the small towns and 
great cities of this country, our heritage as a nation--the physical 
evidence of our past--is at risk. In virtually every corner of this 
land, homes in which grandparents and parents grew up, communities and 
neighborhoods that nurtured vibrant families, schools that were good 
places to learn and churches and synagogues that were filled on days of 
prayer, have suffered the ravages of abandonment and decay.
  In the decade from 1980 to 1990, Chicago lost 41,000 housing units 
through abandonment, Philadelphia 10,000, and St. Louis 7,000. The 
story in our older small communities has been the same, and the trend 
continues. It is important to understand that it is not just the 
buildings that we are losing. It is the sense of our past, the vitality 
of our communities and the shared values of those precious places.
  We need not stand hopelessly by as passive witnesses to the loss of 
these irreplaceable historic resources. We can act, and to that end I 
am introducing today with my colleagues, Mrs. Kennelly, Mr. Lewis, Mrs. 
Johnson of Connecticut, and Mr. English, the Historic Homeownership 
Assistance Act.
  This legislation is almost identical to legislation introduced in the 
104th Congress as H.R. 1662. It is patterned after the existing 
Historic Rehabilitation Investment tax credit. That legislation has 
been enormously successful in stimulating private investment in the 
rehabilitation of buildings of historic importance all across the 
country. Through its use we have been able to save and re-use a rich 
and diverse array of historic buildings: landmarks such as Union 
Station in Washington, D.C.; the Fox Paper Mills, a mixed-used project 
that was once a derelict in Appleton, WI; and the Rosa True School, an 
eight-unit low/moderate income rental project in an historic building 
in Portland, Maine. In my own State of Florida, since 1974, the 
existing Historic Rehabilitation Investment Tax Credit has resulted in 
over 325 rehabilitation projects, leveraging more than $238 million in 
private investment. These projects range from the restoration of art 
deco hotels in historic Miami Beach, bringing economic rebirth to this 
once decaying area, to the development of multifamily housing in the 
Springfield Historic District in Jacksonville.

  The legislation that I am introducing today builds on the familiar 
structure of the existing tax credit but with a different focus. It is 
designed to empower the one major constituency that has been barred 
from using the existing credit--homeowners. Only those persons who 
rehabilitate or purchase a newly rehabilitated home and occupy it as 
their principal residence would be entitled to the credit that this 
legislation would create. There would be no passive losses, no tax 
shelters, and no syndications under this bill.
  Like the existing investment credit, the bill would provide a credit 
to homeowners equal to 20 percent of the qualified rehabilitation 
expenditures made on an eligible building that is used as a principal 
residence by the owner. Eligible buildings would be those that are 
listed on the National Register of Historic Places, are contributing 
buildings in National Register Historic Districts or in nationally 
certified state or local historic districts or are individually listed 
on a nationally certified state or local register. As is the case with 
the existing credit, the rehabilitation work would have to be performed 
in compliance with the Secretary of the Interior's standards for 
rehabilitation, although the bill would clarify the directive that the 
standards be interpreted in a manner that takes into consideration 
economic and technical feasibility.
  The bill also makes provision for lower-income home buyers who may 
not have sufficient federal income tax liability to use a tax credit. 
It would permit such persons to receive a historic rehabilitation 
mortgage credit certificate which they can use with their bank to 
obtain a lower interest rate on their mortgage. The legislation also 
permits home buyers in distressed areas to use the certificate to lower 
their down payment.

  The credit would be available for condominiums and co-ops, as well as 
single-family buildings. If a building were to be rehabilitated by a 
developer for sale to a homeowner, the credit would pass through to the 
homeowner. Since one purpose of the bill is to provide incentives for 
middle-income and more affluent families to return to older towns and 
cities, the bill does not discriminate among taxpayers on the basis of 
income. It does, however, impose

[[Page E522]]

a cap of $50,000 on the amount of credit which may be taken for a 
principal residence.
  The Historic Homeownership Assistance Act will make ownership of a 
rehabilitated older home more affordable for homeowners of modest 
incomes. It will encourage more affluent families to claim a stake in 
older towns and neighborhoods. It affords fiscally stressed cities and 
towns a way to put abandoned buildings back on the tax roles, while 
strengthening their income and sales tax bases. It offers developers, 
realtors, and homebuilders a new realm of economic opportunity in 
revitalizing decaying buildings.
  Mr. Speaker, this bill is no panacea. Although its goals are great, 
its reach will be modest. But it can make a difference, and an 
importance difference. In communities large and small all across this 
nation. The American dream of owning one's home is a powerful force. 
This bill can help it come true for those who are prepared to make a 
personal commitment to join in the rescue of our priceless heritage. By 
their actions they can help to revitalize decaying resources of 
historic importance, create jobs and stimulate economic development, 
and restore to our older towns and cities a lost sense of purpose and 
community.
  I ask unanimous consent that the text of the bill and an explanation 
of its provisions be printed in the Record.

               ``Historic Homeownership Assistance Act''

       Legislation to create a 20 percent tax credit for the 
     rehabilitation of a historic structure occupied by the 
     taxpayer as his principal residence was sponsored last 
     Congress by Representatives Clay Shaw (R-FL) and Barbara 
     Kennelly (D-CT) in the House, and by Senators John Chafee (R-
     RI) and Bob Graham (D-FL) in the Senate. Although this 
     legislation did not become law, it received considerable 
     support in Congress and we are planning for reintroduction 
     next session and an active campaign to secure its passage.


           goals of the historic homeownership assistance act

       Expand homeownership opportunities for low- and middle-
     income individuals and families;
       Stimulate the revival of declining neighborhoods and 
     communities;
       Enlarge and stabilize the tax base of cities and small 
     towns;
       Preserve and protect historic homes.


     major provisions of the historic homeownership assistance act

       Rate of Credit, Eligible buildings: The rate of credit is 
     20 percent of qualified rehabilitation expenditures. Eligible 
     buildings include those listed on national or federally-
     certified state and local historic registers, and buildings 
     which are located in national or federally-certified state 
     and local historic districts. Eligible buildings (or a 
     portion) must be owned and occupied by the tax payer as his 
     principal residence. Condominiums and cooperatives would be 
     eligible for the tax credit. Rehabilitation would have to be 
     performed in accordance with the Secretary of the Interior's 
     Standards for Historic Rehabilitation.
       Maximum Credit, Minimum Expenditures: The maximum credit 
     allowable would be $50,000 for each principal residence, 
     subject to Alternative Minimum Tax provisions. Rehabilitation 
     must be substantial--the greater of $5,000 or the adjusted 
     basis of the building--with an exception for buildings in 
     census tracts targeted as distressed for Mortgage Revenue 
     Bond purposes under I.R.C. Sec. 143(j)(1) and Enterprise and 
     Empowerment Zones, where the minimum expenditure must be 
     $5,000. At least 5 percent of the qualified rehabilitation 
     expenditures would have to be spent on the exterior of the 
     building.
       Mortgage Credit Certificate Provision for Low and Moderate 
     Income Homeowners: Taxpayers who do not have sufficient 
     federal income tax liability to make use of the credit could 
     elect to receive, in lieu of the credit, an Historic 
     Rehabilitation Mortgage Credit Certificate in the face amount 
     of the credit to which the taxpayer is entitled. The taxpayer 
     would then transfer the certificate to the mortgage lender in 
     exchange for a reduced interest rate on the home mortgage 
     loan. The mortgage lender would be permitted to reduce its 
     own federal income tax liability by the face amount of the 
     certificate.
       Targeted Flexibility for Historic Rehabilitation Standards: 
     For buildings in census tracts targeted as distressed or 
     located within an Enterprise and Empowerment Zone, the 
     Secretary would be required to give consideration to: (1) the 
     feasibility of preserving existing architectural or design 
     elements of the interior of such building; (2) the risk of 
     further deterioration or demolition of such building in the 
     event that certification is denied because of the failure to 
     preserve such interior elements; and, (3) the effects of such 
     deterioration or demolition on neighboring historic 
     properties.
       No Passive Activity Rules, No Income Cap on Eligibility: 
     Passive activity rules would not apply because by occupying 
     and rehabilitating a qualifying residence, the individual is 
     not an investor but utilizing the property as his primary 
     residence. There would be no income cap because the proposed 
     legislation is intended not only to foster homeownership and 
     encourage rehabilitation of deteriorated buildings, but also 
     to promote economic diversity within neighborhoods and 
     increased local ad valorem real property, income and sales 
     tax revenues.
       Process for Certifying Qualified Rehabilitation 
     Expenditures: Maintains the certification process for the 
     existing rehab credit, but authorizes the Secretary of the 
     Interior to enter into cooperative agreements allowing the 
     State Historic Preservation Offices (SHPOs) and Certified 
     Local Governments (CLGs) to certify projects within their 
     respective jurisdictions. The SHPOs would have the authority 
     to levy fees for processing applications for certification, 
     provided that the proceeds of such fees are used only to 
     defray expenses associated with the processing of the 
     application.
       Revenue Loss Estimate: The Congressional Joint Committee on 
     Taxation has estimated the revenue loss of the Historic 
     Homeownership Assistance Act to be $368 million over a seven 
     year period.

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