Rep. Ellison Introduces the Fair Tax Treatment for Manufactured Housing Community Cooperatives Act
WASHINGTON–Rep. Keith Ellison (D-MN) released the following statement after introducing the Fair Tax Treatment for Manufactured Housing Community Cooperatives Act (H.R. 3399). The bill would allow residents of manufactured home communities to receive a tax deduction on any interest they paid on the land they own as part of a manufactured home community resident-owned cooperative.
“I am so inspired by the resident-owned manufactured housing communities in my state,” said Rep. Keith Ellison. “When I realized that a quirk in the tax code prevents them from getting the same mortgage interest deduction as other property owners, I wanted to fix it. Hopefully, this change will provide an added incentive to grow the resident-owned cooperative movement.”
"The people we represent are tax-payers, home owners, and land owners. No small accomplishment given that so many of them are working families and retired seniors living on modest incomes. They should have a right to the same benefits enjoyed by other land owners," said Dave Anderson, Executive Director of the National Manufactured Home Owners Association (NMHOA). "We applaud Rep. Ellison for introducing legislation to ensure fair tax treatment for the families living in manufactured home cooperative communities. We call on other members of Congress to support a proposal that will benefit millions of people across the country."
The Fair Tax Treatment for Manufactured Housing Community Cooperatives Act amends the Internal Revenue Code to allow owners of land held cooperatively by a resident-owned manufactured housing community to claim a tax deduction on interest they paid on the mortgage. Current law only allows a deduction on buildings held cooperatively, not land.
This bill builds on the success of resident-owned cooperative communities in many states including New Hampshire, Massachusetts, and Minnesota. For the past two decades, housing providers have aided communities in the transition from privately owned to cooperatively owned in order to preserve a crucial source of affordable housing.
The bill is supported by National Manufactured Homeowners Association (NMHOA), All Parks Alliance for Change (APAC), Manufactured Home Owners’ Association of NJ, Inc., and Prosperity Now.
The Fair Tax Treatment for Manufactured Housing Community Cooperatives Act
Traditionally referred to as “mobile homes,” manufactured homes are a vital aspect of American affordable housing stock for many working families, as well as the elderly and rural In fact, more than 17 million Americans live in manufactured homes across the country and many are located in communities commonly known as “mobile home parks.”
In the past two decades, a national network of housing providers have helped residents purchase and manage manufactured home communities as cooperatives in order to preserve a crucial source of affordable housing. Under this model, homeowners and/or renters can choose to act democratically to gain ownership as a cooperative in order to avoid displacement and ensure housing security.
Nationwide, there are more than 1,000 of these stable, permanent ownership cooperatives – or nonprofit-owned developments -- in more than a dozen states. In New Hampshire, more than 25 percent of manufactured home communities are owned by residents. In Vermont, Massachusetts, Rhode Island, Washington, Montana, Oregon and Minnesota, resident-owned cooperatives and/or non-profit ownership have flourished.
Through cooperative, members continue to own their own homes individually. They also own an equal share of the land beneath the entire neighborhood. Everyone has a say in the way the community is run, and major decisions are made by a democratic vote by a member-elected board of directors. These resident-owned cooperatives have thrived, protecting thousands of homeowners from the threat of eviction, investing in critical communal infrastructure and facilities, all while building a sense of community among neighbors.
However, these successful cooperatives represent only a small portion of our nation’s manufactured housing communities; in fact, only two percent of the nearly 60,000 communities are resident or non-profit owned.
Due to a limitation in the tax code [IRC Sec. 216(b)(1)(b)][i] the residents are unable to claim a tax deduction on the interest they pay towards the land held collectively. Tax law only permits residents to deduct interest on the cooperatively-owned buildings. This bill makes a technical fix to ensure that the owners of a resident-owned cooperatives can claim a personal income tax deduction on the interest they paid on the mortgage for the land.
For more information, contact Carol Wayman on Mr. Ellison’s staff at Carol.Wayman@mail.house.gov or 202.225.4755