Today the House passed the 21st Century ROAD to Housing Act by an overwhelming bipartisan vote of 396-13. This comprehensive housing legislation includes a key AHTCC priority to lift the public welfare investment (PWI) cap from 15 to 20 percent, potentially unlocking billions of dollars in additional investment in the Housing Credit. Additionally, the bill now removes the forced sale of build-to-rent (BTR) properties after seven years as written in the Senate-passed legislation, which would have adversely impacted some Housing Credit properties. The bill also includes language requiring HUD to review its process related to Build America, Buy America (BABA) regulations.
The AHTCC applauds House Financial Services Committee Chairman French Hill (R-AR) and Ranking Member Maxine Waters (D-CA) for advancing the 21st Century ROAD to Housing Act and for making changes that would support the development of Housing Credit properties nationwide. We have joined letters of support with national housing groups and affordable housing industry partners to express support for these improvements in the House-passed bill, and encourage final passage of the 21st Century ROAD to Housing Act.
The 21st Century ROAD to Housing Act includes the following key provisions:
- Lifts the PWI cap from 15 to 20 percent, potentially unlocking billions of dollars in additional investment in the Housing Credit. (See Sec. 203, Community Investment and Prosperity Act)
- This proposal remains one of the AHTCC’s top priorities and would meaningfully increase bank investment in affordable housing.
- The bill also adds a new provision requiring the Comptroller of the Currency and the Federal Reserve Board of Governors to submit a report to Congress on the use of PWIs.
- Bans institutional investors from buying single family homes. (See Sec. 1001, Homes Are For People, Not Corporations)
- The House bill removes the Senate-passed language which would have broadly limited the development of BTR properties and adversely impacted some Housing Credit properties.
- Though a version of the House bill released last week included a clear exemption from BTR provisions for the Housing Credit, the BTR provisions have now been removed entirely.
- On Tuesday evening, House Financial Services Committee leadership also further confirmed in statements of congressional intent that the institutional investor ban is not intended to impact Housing Credit properties:
- “Entities engaged in Federal or state affordability programs like the Low Income Housing Tax Credit program … are all valuable features of our current system that encourage, not reduce, the great availability and affordability of housing … we need to make sure that in the implementation of this section, that these beneficial features are not inadvertently caught up … when they have done nothing to the fundamental problem that we’re trying to solve today, which is this institutional investor challenge, leveling the playing field between individual buyers and large institutional investors,” said Chairman Hill.
- “The bill was not intended to impact military housing, student housing, disability housing or LIHTC supported housing … given our congressional intent, Treasury should use its authority to address these concerns and to minimize market disruptions and mitigate negative impacts on consumer and communities,” said Ranking Member Waters.
- Exempting BTR housing from the institutional investor ban was supported by a bipartisan group of 76 Representatives who signed onto a letter urging House leaders to revise language banning institutional investors from buying single-family homes.
- In addition to working to build support for the congressional sign-on letter, the AHTCC has signed letters with industry partners calling for changes to the BTR provisions, and at the very least, an exemption for the Housing Credit.
- Directs HUD to conduct an evaluation of BABA. (See Sec. 501 – HOME Investment Partnerships Reauthorization and Reform Act)
- Restores the House-passed language from the Housing for the 21st Century Act directing HUD to conduct an evaluation of BABA as it pertains to HOME funds and issue updated guidance as part of broader reforms to the HOME program.
- The AHTCC supports efforts to streamline and simplify BABA requirements, which have adversely impacted affordable housing development.
- Streamlines NEPA reviews for small and infill housing projects. (Sec. 207 – Unlocking Housing Supply Through Streamlined and Modernized Reviews Act)
The House bill also restored several community banking provisions that are a priority for Chairman Hill and dropped provisions from the Senate bill that would have created a permanent disaster recovery framework and expanded the Rental Assistance Demonstration (RAD) and Moving to Work programs.
This 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. The legislation will now go back to the Senate for consideration, which could include taking up the House-passed legislation as is or continuing negotiations.
“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.”
“There are a significant number of Housing Credit investors that would like to increase their affordable housing investments, but are limited because of the PWI cap,” said Dudley Benoit, President of the AHTCC Board of Directors and Senior Managing Director at Walker & Dunlop. “The PWI cap increase would serve as a welcome boost, allowing banks to more effectively leverage the Housing Credit and increase their investments in affordable housing nationwide.”
The Impact of Lifting the PWI Cap
Lifting the PWI cap from 15 to 20 percent would expand private capital available for affordable housing by increasing banks’ capacity to invest in the Housing Credit. The AHTCC, Affordable Housing Investors Council and National Association of Affordable Housing Lenders recently surveyed 22 banks, representing more than $14 billion in 2024 Housing Credit investments. The survey found that over 42 percent of the represented investments ($6.1 billion) came from banks approaching the current 15 percent PWI cap. Expanding banks’ capacity to invest in the Housing Credit could help sustain demand for the additional credits made available through the program’s historic expansion in the One Big, Beautiful Bill Act (H.R. 1) earlier this year. Read more in the AHTCC’s fact sheet outlining how the PWI cap increase would impact affordable housing production.
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