Last night the Senate passed bipartisan comprehensive housing legislation, the ROAD to Housing Act (S.2651), as an amendment to the National Defense Authorization Act (S.2296). The legislation includes the Community Investment and Prosperity Act (S.2464), which raises the cap on banks’ public welfare investments (PWI) from 15% to 20%, unlocking additional capital for investment in affordable housing. See the release on the bill’s passage from Senate Banking Committee Chairman Tim Scott (R-SC) here.
The Housing Credit accounts for roughly 80 percent of national bank public welfare investments, and there are a significant number of banks limited in their ability to invest further in the Housing Credit because of the PWI cap. The cap increase would serve as a welcome boost, allowing banks to more effectively leverage the Housing Credit’s recent historic expansion, which is projected to finance over 1.2 million additional affordable rental homes in the next decade. The AHTCC is currently conducting a survey of bank investors to assess the potential impact of lifting the PWI cap and will share the results soon.
In August the ROAD to Housing Act was advanced unanimously by the Senate Banking Committee during its first markup of housing legislation in over a decade. “The Affordable Housing Tax Credit Coalition appreciates the Senate Banking Committee’s ambitious effort to expand our nation’s affordable housing supply and modernize key housing programs,” said Emily Cadik, Chief Executive Officer of the Affordable Housing Tax Credit Coalition. “We especially appreciate a number of proposals in the ROAD to Housing Act that will help support affordable housing investment using the Low-Income Housing Tax Credit, which was recently expanded as part of One Big, Beautiful Bill and remains the primary driver of affordable housing supply in the U.S.”
In addition to the PWI cap increase, the ROAD to Housing Act includes a number of other proposals to modernize housing programs:
- Includes provisions from the HOME Investment Partnerships Reauthorization and Improvement Act (S.948/H.R.2031), including permanently authorizing the HOME program, adding flexibility for localities, streamlines inspections, and expands nonprofit eligibility
- Removes the Rental Assistance Demonstration (RAD) cap and makes the program permanent, along with several reforms.
- Includes elements of the Housing Supply Frameworks Act (H.R.2840/S.1299), directing HUD to promote zoning and land use best practices.
- Allows HUD to prioritize HUD grants in Opportunity Zones.
- Streamlines National Environmental Policy Act (NEPA) reviews for small and infill housing projects.
- Makes several changes to support development in rural areas, including requiring the US Department of Agriculture and HUD to work together to combine environmental reviews and inspections.
- Simplifies voucher inspection requirements, allowing units that are financed through other federal housing programs to automatically satisfy voucher inspection requirements if inspected within the past year and permitting pre-inspections for new landlords.
See the section-by-section summary here and legislative text here.
Though there are no current plans for the House to take up the full ROAD to Housing Act, House Financial Services Committee leadership have already indicated a willingness to take up elements of the legislation soon. The AHTCC will continue to monitor the progress of the PWI cap proposal and broader ROAD to Housing Act, and provide updates pertaining to next steps and advocacy.
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