I 
118TH CONGRESS 
1ST SESSION H. R. 5176 
To amend the Internal Revenue Code of 1986 to allow for nonrecognition 
of gain on real property sold for use as affordable housing. 
IN THE HOUSE OF REPRESENTATIVES 
AUGUST 8, 2023 
Mr. SCHIFF (for himself and Mr. PETERS) introduced the following bill; which 
was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to allow for 
nonrecognition of gain on real property sold for use 
as affordable housing. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Affordable and Home-
less Housing Incentives Act of 2023’’. 
SEC. 2. NONRECOGNITION OF GAIN ON PROPERTY SOLD 
FOR USE AS AFFORDABLE HOUSING. 
(a) IN GENERAL.—Section 1033 of the Internal Rev-
enue Code of 1986 is amended by redesignating subsection 
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(k) as subsection (l) and by inserting after subsection (j) 
the following new subsection: 
‘‘(k) SALES FOR USE AS AFFORDABLE HOUSING.— 
‘‘(1) IN GENERAL.—For purposes of this sub-
title, if real property is sold or otherwise transferred 
to a qualified housing operator for use or develop-
ment by such operator as affordable housing and 
such property meets the requirements of paragraphs 
(3) and (4), such sale or transfer shall be treated as 
an involuntary conversion to which this section ap-
plies. 
‘‘(2) QUALIFIED
HOUSING
OPERATOR.—For 
purposes of this section, the term ‘qualified housing 
operator’ means any of the following: 
‘‘(A) A State or local government, or any 
political subdivision or instrumentality thereof. 
‘‘(B) A tribally designated housing entity 
(as such term is defined in section 4 of the Na-
tive American Housing Assistance and Self-De-
termination Act of 1996). 
‘‘(C) A community housing development 
organization (as such term is defined in section 
104 of the Cranston-Gonzalez National Afford-
able Housing Act). 
‘‘(D) An organization— 
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‘‘(i) described in section 501(c) and 
exempt 
from 
taxation 
under 
section 
501(a), 
‘‘(ii) the purpose of which includes 
providing affordable housing, and 
‘‘(iii) which— 
‘‘(I) has received Federal, State, 
or local grant funds to develop or op-
erate affordable housing, or 
‘‘(II) is described in section 
42(h)(5)(B) with respect to a quali-
fied low-income housing project that is 
allocated 
housing 
credit 
dollar 
amounts under section 42. 
‘‘(3) AFFORDABLE HOUSING REQUIREMENT.— 
The requirements of this paragraph are met with re-
spect to property if such property has, as of the date 
of the sale or transfer referred to in paragraph (1), 
a covenant or other binding legal restriction suffi-
cient to— 
‘‘(A) obligate, at all times during the 30- 
year period beginning on such date, each owner 
of such property with respect to the portion of 
such period during which such owner owns such 
property, to maintain such property as either— 
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‘‘(i) residential rental property (within 
the meaning of section 168) not less than 
75 percent of the units of which are af-
fordable to low-income families and either 
occupied by or available for use by low-in-
come residents, or 
‘‘(ii) a shelter eligible for assistance 
under title IV of the McKinney-Vento 
Homeless Assistance Act, and 
‘‘(B) provide any person a right to obtain 
injunctive relief to enforce the obligations de-
scribed in subparagraph (A). 
‘‘(4) NOTIFICATION OF DEPARTMENT OF HOUS-
ING AND URBAN DEVELOPMENT.—The requirements 
of this paragraph are met with respect to any prop-
erty if, not later than 90 days after the date of the 
sale or transfer referred to in paragraph (1), the 
transferor notifies the Secretary of Housing and 
Urban Development of such transfer in such manner 
as such Secretary may provide. 
‘‘(5) SPECIAL RULE WITH RESPECT TO PERIOD 
WITHIN WHICH PROPERTY MUST BE REPLACED.—In 
the case of a sale or transfer described in paragraph 
(1), subsection (a)(2)(B)(i) shall be applied by sub-
stituting ‘3 years’ for ‘2 years’. 
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‘‘(6) SPECIAL RULE FOR REAL PROPERTY HELD 
FOR PRODUCTIVE USE IN TRADE OR BUSINESS.— 
For purposes of subsection (a), if the real property 
described in paragraph (1) is held for productive use 
in a trade or business or for investment, property of 
a like kind to be held either for productive use in a 
trade or business or for investment shall be treated 
as property similar or related in service or use to the 
property so described.’’. 
(b) ENFORCEMENT OBLIGATIONS OF THE DEPART-
MENT OF HOUSING AND URBAN DEVELOPMENT.—With 
respect to each property with respect to which the Sec-
retary of Housing and Urban Development receives notifi-
cation under paragraph (4) of section 1033(k) of the In-
ternal Revenue Code of 1986, such Secretary, acting 
though the Departmental Enforcement Center (DEC) of 
the Department of Housing and Urban Development, shall 
ensure (not less often than every 5 years during the 30- 
year period described in paragraph (3)(A) of such section) 
that such property complies with the requirements of such 
paragraph (3)(A), including if necessary by obtaining the 
injunctive relief described in paragraph (3)(B) of such sec-
tion. 
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(c) EFFECTIVE DATE.—The amendment made by 
this section shall apply to sales and transfers after the 
date of the enactment of this Act. 
Æ 
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