Small Landlord Tax Protection & Tenant Stability Act
Purpose:
To strengthen housing stability in high-tax, high-displacement areas by offering federal relief to small landlords who provide naturally affordable housing, maintain safe living conditions, and uphold community standards—while preventing forced property sales and tenant evictions caused by property tax burdens.
How It Works:
This act provides a federal tax credit or direct rebate (optional opt-in model) for qualifying small landlords (owning between 1–6 residential rental units), with specific incentives for properties located in high-tax urban areas like Illinois’ 1st Congressional District.
Eligibility Criteria:
Affordability Standard:
Must maintain rental prices at or below 80% of the Area Median Income (AMI) for the unit’s size.
Rents must not exceed 30% of gross tenant income (verified through lease agreements or subsidy participation, if applicable).
Capital Improvement Reporting:
Must show documented investment of at least 3% of gross rental income annually toward property maintenance, repairs, or upgrades.
Eligible improvements include: roofing, plumbing, HVAC, lead abatement, safety systems, and energy efficiency upgrades.
Tax Compliance:
Landlord must be current on local property taxes and not under active foreclosure or tax sale proceedings.
Property Management Standards:
Property must meet minimum housing code standards and not have open violations from the past 12 months.
Landlords must provide proof of active lease agreements and occupancy.
Incentive Details:
Tax Credit Amount: Up to $3,000 per eligible unit per year for compliant landlords.
Bonus Credit: Additional $1,000 per unit available for:
Units rented to veterans, elderly tenants, or single-parent households.
Units that undergo environmentally certified upgrades (e.g. insulation, solar, energy-efficient appliances).
Alternative Option: Direct annual federal rebate disbursement for landlords without sufficient tax liability to benefit from a credit.
Why It Matters (Impact):
Protects Housing Access: Keeps low-income and working-class tenants housed in communities they’ve long called home.
Preserves Community Ownership: Prevents distressed sales to out-of-state investors or predatory buyers by helping owners stay afloat.
Strengthens Neighborhood Safety and Value: Encourages proactive maintenance and discourages slumlords by incentivizing upkeep and compliance.
Boosts Local Economic Stability: Helps prevent vacancy spikes and small-business closures tied to tenant turnover and blight.
Key Metrics (KPIs):
Target: Stabilize or reduce CD1’s small-property foreclosure rate by 25% in 3 years.
Goal: Retain 10,000 naturally affordable housing units across the district.
Impact: Keep 5,000+ families housed who might otherwise be displaced by rent hikes or speculative ownership turnover.
