H.R. 8988: Frank Adelmann Manufactured Housing Community Sustainability Act of 2026

This bill, known as the Frank Adelmann Manufactured Housing Community Sustainability Act of 2026, seeks to create a federal tax credit to encourage the sale of manufactured home communities (often referred to as mobile home parks) to their residents or nonprofit entities. The primary objective is to assist in the preservation and long-term sustainability of these communities, which are vital sources of affordable housing, particularly for low-income households.

Key Provisions of the Bill:

• Tax Credit for Sales: The bill allows sellers of manufactured home communities to receive a tax credit equal to 75% of the qualified gain from the sale of their property to a qualified manufactured home community cooperative or nonprofit. This credit incentivizes the transfer of ownership from private, often for-profit owners to resident cooperatives or nonprofit entities aimed at preserving affordable housing.
• Definition of Qualified Gain: The qualified gain must come from the sale or exchange of real property, with the property intended to be used as a manufactured home community. Sellers must have owned the property for at least two years, and the sale should include a covenant ensuring the property will remain a manufactured home community for a minimum of 50 years.
• Governance Requirements: The bill stipulates governance rules for the cooperatives or nonprofit entities, ensuring that all residents have a voice in management decisions by participating in board elections.
• Aid in Wealth Building: By facilitating community ownership, the bill aims to help residents build equity and stabilize their housing situation, mitigating some of the risks associated with renting land while living in manufactured homes.
• Eviction and Community Closure Protections: The sale to cooperatives is intended to reduce the vulnerability of current residents to sudden evictions or community closures, which can be financially and emotionally distressing.
• Effective Date: The provisions of the bill would apply to taxable years beginning after December 31, 2026.
• Tax upon Covenant Violation: If the new owner violates the agreement to maintain the property as a manufactured home community, a tax of 20% of any net proceeds from the property sale would be imposed.

Context and Rationale:

The legislation recognizes that manufactured homes are a significant segment of affordable housing in the United States, housing over 22 million people and representing approximately 6% of total housing stock. The bill addresses ongoing challenges faced by low-income residents in manufactured housing, including rising costs and instability in land ownership. It follows a model established by existing limited equity cooperatives where community members can collectively manage and govern their housing resource while keeping housing costs more stable compared to traditional rental arrangements.

Relevant Companies:

• None found