Jun 22

Senate Passes 21st Century ROAD to Housing Act

Legislation Advances After Breakthrough Bicameral Deal

Today the Senate voted by an overwhelming margin of 85-5 to pass an amended version of the 21st Century ROAD to Housing Act, which has bicameral support and is expected to advance through the House as soon as tomorrow.

This version of the 21st Century ROAD to Housing Act (see bill text and section-by-section summary) is the fifth iteration of the legislation as it volleyed between the Senate and the House for months. Each prior version of the legislation passed its respective chamber with overwhelming bipartisan support, though until this version, differences remained between the House and Senate approaches. Last week’s joint announcement from Senate and House leadership demonstrated clear support from both parties and in both chambers for the new negotiated version. House Financial Services Committee Ranking Member Maxine Waters (D-CA) also issued a statement to encourage House Democratic support for the bill.

This updated version of the legislation includes the following AHTCC key priorities:

  • Lifts the public welfare investment (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 is one of the AHTCC’s top priorities and would meaningfully increase bank investment in affordable housing.
    • The change would be effective immediately after the bill becomes law, subject to approval from a bank’s regulator.
    • The bill would also require 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)
    • This bill removes the earlier Senate-passed language which would have broadly limited the development of built-to-rent (BTR) properties and adversely impacted some Housing Credit properties.
    • During House floor debate on the legislation in May, 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 Build America, Buy America (BABA). (See Sec. 501 – HOME Investment Partnerships Reauthorization and Reform Act)
    • The updated legislation 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.
      • See the industry proposal recommending changes to current BABA implementation in order to reduce uncertainty and administrative burdens and letter urging Congress to incorporate provisions from the HOME Reform Act (H.R.5798) into the 21st Century ROAD to Housing Act.
      • Note that there was also new legislation (Build Housing Affordably Act) introduced last week by Reps. Flood (R-NE) and Goodlander (D-NH) to streamline the BABA process for housing, as well as language addressing BABA in the House Transportation, Housing and Urban Development (THUD) appropriations bill.
  • Streamlines National Environmental Policy Act (NEPA) reviews for small and infill housing projects. (See Sec. 206 – Unlocking Housing Supply Through Streamlined and Modernized Reviews Act)

The new version of the Senate bill also adds several provisions from the Senate’s prior version back in, including:

  • Lifts the Rental Assistance Demonstration (RAD) cap with a new limit of 100,000 units.
  • Authorizes the Community Development Block Grant Disaster Recovery (CDBG-DR) program for three years and establishes the Office of Disaster Management and Resiliency within HUD to administer the program.
  • Expands the Moving to Work (MTW) program.

“The Affordable Housing Tax Credit Coalition applauds Senate Banking Committee Chairman Tim Scott (R-SC), Ranking Member Elizabeth Warren (D-MA), House Financial Services Committee Chairman French Hill (R-AR) and Ranking Member Maxine Waters (D-CA) for their continued leadership on the 21st Century ROAD to Housing Act and for reaching a final bicameral agreement 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.”

“The 21st Century ROAD to Housing Act would substantially increase our ability to finance more affordable housing,” said Dudley Benoit, President of the AHTCC Board of Directors and Senior Managing Director at Walker & Dunlop. “In particular, 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.