Legislation Includes Proposal to Lift PWI Cap
Today, the Senate advanced the bipartisan 21st Century ROAD to Housing Act by a vote of 89-10. The comprehensive housing legislation includes the proposal to lift the public welfare investment (PWI) cap from 15 to 20 percent, which could unlock billions of dollars in additional investment in the Housing Credit. See the section-by-section and bill text.
Previously, Senate Banking Committee Chairman Tim Scott (R-SC) released an amendment in the nature of a substitute, which combined elements of the Senate’s ROAD to Housing Act (S.2651) and the House’s Housing for the 21st Century Act (H.R. 6644), providing the basis for the 21st Century ROAD to Housing Act.
The comprehensive legislation includes provisions to:
- Lift the public welfare investment (PWI) cap from 15 to 20 percent, which could unlock billions of dollars in additional investment in the Housing Credit. (See Sec. 204, Community Investment and Prosperity Act)
- Ban institutional investors from buying single family homes. (See Sec. 901, Homes Are For People, Not Corporations)
- Note that as written, the proposal could adversely impact some Housing Credit properties, as it does not clearly exempt the Housing Credit from the forced sale of build-to-rent properties after seven years. The AHTCC and others have weighed in with Congress to encourage changes to clearly exempt Housing Credit properties from the institutional investor ban as the legislation continues to move through the process.
- Streamline NEPA reviews for small and infill housing projects. (Sec. 208 – Unlocking Housing Supply Through Streamlined and Modernized Reviews Act)
- Lift the RAD cap. (Sec. 201 – Rental Assistance Demonstration Program)
- Reform the HOME program. (see Sec. 502 – HOME Investment Partnerships Reauthorization and Reform Act)
- Note that the bill does NOT include the House-passed language from the Housing for the 21st Century Act that would direct HUD to conduct an evaluation of Build America, Buy America (BABA) as it pertains to HOME funds and issue updated guidance. The AHTCC and our partners will continue to pursue opportunities to address overly burdensome BABA requirements.
The House will now need to vote on the legislation again to align with the Senate-passed version or make further negotiations. In recent days, House Financial Services Committee Chairman French Hill (R-AK) has indicated he will not accept the Senate’s bill without changes and will insist that the bill go to conference to include more of the House’s priorities, a call that was echoed by House Majority Leader Steve Scalise (R-LA). If the House and Senate choose to resolve differences through a conference committee, the AHTCC encourages swift action to enact a final housing package and supports any improvements that further strengthen the Housing Credit and continue to support private investment in affordable housing. In particular, we encourage changes to clearly exempt Housing Credit properties from the ban on institutional investors.
The White House has issued its support of the current legislation, which includes the President’s priority on banning institutional investors.
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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