The Affordable Housing Tax Credit Coalition (AHTCC) applauds the U.S. House of Representatives for proceeding with a vote to advance the bipartisan 21st Century ROAD to Housing Act, and urges final passage of this legislation to modernize and strengthen affordable housing programs. The AHTCC also applauds House Financial Services Committee Chairman French Hill (R-AR) and Ranking Member Maxine Waters (D-CA) for making improvements in this version of the bill that would increase the ability to finance and develop affordable housing financed by the Low-Income Housing Tax Credit (Housing Credit).
“The Affordable Housing Tax Credit Coalition applauds House Financial Services Committee Chairman Hill and Ranking Member Waters for their leadership on the 21st Century ROAD to Housing Act, which would expand our nation’s affordable housing supply and modernize key programs,” said Affordable Housing Tax Credit Coalition CEO Emily Cadik. “We especially appreciate a number of proposals in the 21st Century ROAD to Housing Act that will help support affordable housing investment using the Low-Income Housing Tax Credit, which was recently expanded and remains the primary driver of affordable housing supply in the U.S. Lifting the public welfare investment cap will unlock billions of dollars in new private investment in the Housing Credit, and additional changes in the updated House legislation will further strengthen our ability to finance more affordable housing to address our nation’s immense need.”
The updated version of the 21st Century ROAD to Housing Act is an amendment to the Senate’s 21st Century ROAD to Housing Act, led by Senate Banking Committee Chairman Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA), which passed the Senate in March.
Consistent with all prior versions of the legislation, the 21st Century ROAD to Housing Act includes a key proposal to increase banks’ public welfare investment (PWI) cap from 15 to 20 percent – unlocking additional capacity for banks to invest in critically-needed affordable housing development across the country.
Raising the PWI cap will expand the availability of private capital for affordable housing development and help maximize the impact of the historic expansion of the Housing Credit enacted in the One Big Beautiful Bill Act (OBBBA) last year. The Housing Credit provisions in the OBBBA are estimated to finance more than 1.2 million additional affordable homes over the next decade. However, banks’ ability to invest in the Housing Credit is constrained by the PWI cap, which limits the amount banks may invest in affordable housing and other qualifying community investments. When Congress last raised the PWI cap from 10 to 15 percent in 2006, it led to a significant increase in community investment, with national bank PWIs growing from $3.1 billion in 2005 to $27.9 billion in 2024.
Increasing the PWI cap could unlock billions of private sector investment in affordable housing. In 2024, the private sector provided over $28.9 billion in Housing Credit investment, approximately 80 percent of which was supplied by banks. In a recent survey of 22 banks, representing more than $14 billion in Housing Credit investments in 2024, over 42 percent of the reported investments in affordable housing ($6.1 billion) came from banks approaching the current 15 percent PWI cap.
The House’s amendment also makes several key improvements that would further support Housing Credit development. The legislation no longer requires the forced sale of build-to-rent properties after seven years and now explicitly exempts the Housing Credit from provisions included in the Senate-passed legislation regarding institutional investors, which would have adversely impacted some Housing Credit properties. This change was supported by a bipartisan group of 76 Representatives who signed a letter urging House leaders to revise language banning institutional investors from buying single-family homes. In addition, the bill restores the House-passed language from the Housing for the 21st Century Act which directs HUD to conduct an evaluation of Build America, Buy America (BABA) as it pertains to HOME funds and issue updated guidance. The AHTCC supports efforts to streamline and simplify BABA requirements, which have adversely impacted affordable housing development.
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