Connecticut SB 254: AN ACT CONCERNING TAX CREDITS FOR THE CONVERSION OF COMMERCIAL PROPERTIES.

Bill Text

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General Assembly Raised Bill No. 254
February Session, 2026 LCO No. 1690

Referred to Committee on HOUSING

Introduced by:
(HSG)

AN ACT CONCERNING TAX CREDITS FOR THE CONVERSION OF
COMMERCIAL PROPERTIES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

Section 1. (NEW) (Effective July 1, 2026, and applicable to taxable years 1
commencing on and after July 1, 2026) (a) As used in this section: 2
(1) "Affordable housing" has the same meaning as provided in section 3
8-39a of the general statutes; 4
(2) "Commercial building" means a structure primarily designed or 5
used for nonresidential purposes, including, but not limited to, as a 6
hotel, retail space, office space or an industrial building; 7
(3) "Commissioner" means the Commissioner of Housing; 8
(4) "Conversion plan" means any construction plan and specifications 9
for the proposed conversion of a commercial building into a residential 10
development that contains sufficient detail to enable the commissioner 11
to evaluate compliance with the standards developed under the 12
provisions of subsections (c) and (k) of this section; 13

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(5) "Dwelling unit" has the same meaning as provided in section 47a-14
1 of the general statutes; 15
(6) "Industrial building" means a structure that is used primarily for 16
industrial activity and that is generally not open to the public, including 17
but not limited to, warehouses, factories and storage facilities; 18
(7) "Nonprofit corporation" means a nonprofit corporation 19
incorporated pursuant to chapter 602 of the general statutes or any 20
predecessor statutes thereto, and having as one of its purposes the 21
construction, conversion, ownership or operation of housing; 22
(8) "Owner" means (A) any taxpayer filing a state of Connecticut tax 23
return who possesses title to a commercial building, or prospective title 24
in the form of a purchase agreement or option to purchase a commercial 25
building to be converted into a residential development, or (B) a 26
nonprofit corporation that possesses such title or prospective title; 27
(9) "Qualified conversion expenditure" means any cost incurred for 28
the physical construction involved in the conversion of a commercial 29
building into a residential development. "Qualified conversion 30
expenditure" does not include: (A) The owner's personal labor, (B) the 31
cost of site improvements, unless to provide building access to persons 32
with disabilities, (C) the cost of a new addition, except as may be 33
required to comply with any provision of the State Building Code, State 34
Fire Prevention Code or the State Fire Safety Code, (D) any cost 35
associated with the conversion of an outbuilding, unless such building 36
contains one or more dwelling units, and (E) any nonconstruction cost 37
such as architectural fees, legal fees and financing fees; and 38
(10) "Residential development" means a structure that contains one 39
or more dwelling units. 40
(b) Not later than January 1, 2027, the Commissioner of Housing shall 41
establish a program to administer a system of tax credit vouchers within 42
the resources, requirements and purposes of this section for owners 43

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converting commercial buildings into residential developments or 44
taxpayers making contributions that are qualified conversion 45
expenditures. Any owner eligible to apply for a tax credit voucher 46
pursuant to this section shall be eligible for such voucher in an amount 47
equal to ten per cent of the total qualified conversion expenditure. 48
(c) Not later than January 1, 2027, the commissioner shall develop 49
standards for the approval of tax credit vouchers for the conversion of 50
commercial buildings into residential developments for which a tax 51
credit voucher is sought. Any such standards shall take into account 52
whether such conversion will create or preserve units for affordable 53
housing. The commissioner shall post such standards on the 54
Department of Housing's Internet web site. 55
(d) Prior to beginning any conversion work on a commercial building 56
for which an owner will seek a tax credit voucher under this section, 57
such owner shall submit to the commissioner (1) a conversion plan for 58
a determination of whether such plan meets any standards developed 59
under the provisions of subsections (c) and (k) of this section, (2) an 60
estimate of the qualified conversion expenditures made, and (3) any 61
other information prescribed by the commissioner. Not later than sixty 62
days after receipt of such plan, estimate and other information, the 63
commissioner shall determine whether such plan conforms to the 64
standards developed under the provisions of subsections (c) and (k) of 65
this section. 66
(e) If the commissioner certifies that the conversion plan conforms to 67
the standards developed under the provisions of subsections (c) an