A09872 - Accessory Dwelling Unit Incentive Act

• Establishes a forgivable loan program through the Division of Homes and Community Renewal for owner-occupied properties creating accessory dwelling units, with loans up to $75,000 or 50% of project costs (whichever is less) at prevailing market rates over 20 years.

• Loans are forgiven if the accessory dwelling unit is rented to tenants meeting income limits (100% of state mortgage agency low-interest rate program limits) and affordable rent guidelines (70% of area median income) for the entire 20-year period.

• Creates a state income tax credit up to $10,000 equal to 50% of the difference between market rate rent and affordable rent charged to qualifying tenants.

• Allows counties, cities, towns, villages, and school districts to adopt local laws or resolutions providing property tax exemptions for the increased property value attributable to affordable accessory dwelling units meeting the program's occupancy and rental requirements.

• Requires the Division to issue annual reports on financed projects and establish a technical assistance program for homeowners seeking to create accessory dwelling units.