S-4613-119
Read twice and referred to the Committee on Finance.
What it does
This bill would create a new federal business tax credit equal to 75% of the capital gain a property owner receives when selling a manufactured home community (mobile home park) to a resident-owned cooperative or a qualifying nonprofit corporation. To qualify, the seller must have owned the property for at least two years, and the buyer must agree — in a recorded covenant — to keep the land as a manufactured home community for at least 50 years. If the buyer later violates that covenant, a 20% tax on net sale proceeds would be imposed on the buyer. The credit would apply to tax years beginning after December 31, 2026.
Who benefits
Current owners of manufactured home communities (mobile home parks) who sell to qualifying buyers would receive a substantial reduction in their capital gains tax liability. Residents of manufactured home communities — over 22 million Americans, disproportionately low-income and rural — would benefit if more communities convert to resident or nonprofit ownership, providing greater housing stability and protection from rent increases or closure. Resident cooperative organizations and nonprofit housing developers would gain a stronger financial incentive to acquire communities. Rural communities, where manufactured housing represents 13% of occupied homes, would benefit from long-term preservation of affordable housing stock. Indirectly, local governments could benefit from reduced displacement costs and more stable low-income housing.
Who is hurt
Commercial real estate investors and private equity firms that currently purchase manufactured home communities on the open market would face a competitive disadvantage, as sellers would have a strong tax incentive to choose resident or nonprofit buyers over commercial buyers. Sellers who do not meet the two-year ownership requirement would be ineligible. The federal government would forgo tax revenue on qualifying capital gains. Residents in states whose laws restrict long-term land-use covenants to less than 50 years may receive weaker long-term protections. Buyers who later need to change land use — even for legitimate reasons — would face a 20% tax penalty on net proceeds, which could create financial hardship for cooperatives or nonprofits in distressed circumstances.
Supporters argue
Supporters argue that manufactured housing is the largest source of unsubsidized affordable housing in the United States, sheltering over 22 million people with a median household income of $35,000, yet receives almost no federal support. They contend that the core vulnerability — residents owning their homes but not the land beneath them — leaves low-income families exposed to sudden rent increases averaging 5.9% annually in commercial parks, compared to just 0.9% in resident-owned communities. By offsetting capital gains taxes, the bill creates a market-based incentive that costs the federal government only when a qualifying sale occurs, and the 50-year covenant and recapture tax ensure the public benefit is durable rather than temporary.
Opponents argue
Opponents argue that a 75% tax credit on capital gains is an extraordinarily large subsidy that effectively transfers most of the tax burden from a private seller to the general public, with no guarantee the resident cooperative or nonprofit will successfully manage the community long-term. They contend that the bill distorts the real estate market by heavily penalizing commercial sales, potentially reducing overall investment in manufactured housing communities and discouraging new park development. Critics may also argue that the 50-year covenant and recapture tax create inflexible land-use restrictions that could prevent communities from adapting to changing local needs, and that the bill's benefits are geographically uneven, favoring states like New Hampshire that already have strong resident-ownership infrastructure.