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Senate Committee Considers Tax Credit Proposal To Boost Building Redevelopment
A proposed tax credit could help convert vacant and underutilized buildings into modern housing and commercial spaces.
On March 27, the Senate Taxes Committee heard SF 768, sponsored by Sen. Zaynab Mohamed (DFL–Minneapolis). The bill would create the Catalyzing Underutilized Buildings (CUB) Tax Credit, modeled after the Historic Structure Rehabilitation Tax Credit, to make redevelopment projects more financially feasible. The bill was laid over for possible inclusion in the omnibus tax bill.
Many cities are working with developers to turn vacant and underutilized buildings into affordable housing. Examples of potential qualifying projects include converting schools, office buildings, and shopping centers into housing and/or modern commercial spaces.
Minneapolis Mayor Jacob Frey testified in support of the bill and the League submitted a letter in support.
The House bill is HF 457, sponsored by Rep. Bobbie Harder (R–Henderson), and was heard earlier this session by the House Housing Finance and Policy Committee and the House Taxes Committee.
LMC staff take
The CUB Tax Credit could be a great tool for cities both in the metro and in Greater Minnesota to repurpose buildings to create more housing, mitigate against property tax shifts due to declining valuations, and support economic development. The bill has bipartisan support, and interested cities should contact their legislators to voice support for the creation of a new redevelopment tool.