National Policy Advocacy

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Home by Hand is leading a national policy effort to create a federal affordable homeownership tax credit, which will provide a new stream of equity investment for developing and renovating 1-4 family housing in distressed neighborhoods.  

In hundreds of communities throughout the country, neighborhood revitalization is being stymied by what has become known as "the appraisal gap" -- the situation in which the cost of rehabilitating or building a home is greater than the post-construction value of the home.

While we have figured out how to close development gaps in low-income, multi-family rental housing, we have yet to create a reinvestment stream to close the appraisal gap for our country’s declining 1-4 family housing stock even though this housing typology accounts for the greatest percentage of all residential structures in cities such as Newark, Hartford, Pittsburgh, New Orleans, Springfield, Detroit, Flint, Stockton, and Memphis.

The appraisal gap contributes to four interrelated conditions that challenge urban prosperity:

Racial inequity - The lack of capital for reinvestment in low- and moderate-income neighborhoods has exacerbated racial inequities, in particular, the great disparity between African American family wealth and the family wealth of every other ethnic and racial group in America.  As reinvestment-starved neighborhoods continue to decline, so do the assets of the families that own property in them.

Conversion of homeownership housing to rental housing - The dearth of reinvestment dollars in postindustrial urban areas creates a favorable environment for bottom-feeding investors, who build up large rental portfolios by buying up foreclosed homes that were previously owner-occupied.  Poorly-maintained rental housing, owned by absentee landlord/investors, undermines quality of life and spurs declining property values in small and mid-sized cities across the country.

Blight, vacancy, and abandonment - The short-lived Neighborhood Stabilization Program (NSP) provided gap financing that enabled housing developers to build and rehab single-family homes at previously unseen production rates. In New Orleans alone, housing developers built 232 owner-occupied houses on vacant city-owned lots with NSP2 funding. In markets where the "numbers don't work" – e.g., it costs more to build or rehab a house than the property can be sold for – owners will walk away from homes that are no longer habitable and can't be refinanced or sold.

No activity = no progress - Without a financing tool to close the appraisal gap, even the most resourceful housing developers can not (and will not) be able to address the thousands of vacant R-1 zoned properties that burden distressed neighborhoods.

With an annual allocation of just $1.80 per capita, we estimate that a new tax credit program would achieve the following every year:

- 50,000 homes built or rehabbed
- $2 billion in private investment
- $6 billion in total development activity
- 122,000 jobs in construction and construction-related industries
- $4 billion in wages
- $2 billion in federal, state, and local tax revenues

Quality of life outcomes from this tax credit would include improved property values, increases in family wealth, less blight and abandonment in distressed neighborhoods, and more and better options for shelter – all of which indirectly enhance multiple determinants of health and well-being for residents of these communities.


Our partners

Atlanta Neighborhood Development Partnership

One HolyOke CDC (Holyoke, MA)

Compliance & Community Consultants (Detroit, MI)

City Life Builders (Baltimore, MD)

Timothy 618 (Baltimore, MD)

Telesis Corporation (Baltimore, MD)


Center for Community Progress

National Association of Affordable Housing Lenders

Housing Partnership Network

Local Initiatives Support Corporation

National Community Stabilization Trust

Habitat for Humanity



Home by Hand would like to thank the following organizations for funding our policy work: