Congress quietly expands affordable housing near transit—but will it reach those who need it most?

What it does

This bill increases the federal Low-Income Housing Tax Credit (LIHTC) by 50% for new buildings and rehabilitation projects located within half a mile of transit stations (rail, bus, harbor, waterway) in high-density zones, with an extra 5% boost for Hawaii, Alaska, and U.S. territories. It caps the total designated areas in any metro region to 20% of population. The bill also directs HUD to study regional cost-of-living differences tied to transit access and recommend adjustments to how tax credits are allocated to states.

Why we flagged it

The bill's core mechanism is a targeted tax credit enhancement designed to increase affordable housing supply near public transit. It is a straightforward fiscal incentive with clear public-housing policy intent, not a deregulation, carve-out, or hidden rider.

What the text implies

• The 50% basis increase may disproportionately benefit developers and investors in high-opportunity transit corridors, potentially concentrating affordable housing in already-desirable neighborhoods rather than distributing it equitably across regions.
• The 20% population cap on designated areas per metro region could create competitive pressure and gaming of designations, with local governments and developers racing to secure limited slots.
• The HUD study on cost-of-living adjustments may reveal that current LIHTC allocations systematically underfund high-cost regions, potentially triggering future legislative pressure to rebalance credits away from lower-cost states.
• Coordination with existing 'high cost area' provisions may create unintended gaps where some transit-rich neighborhoods fall outside both programs due to overlapping exclusions.

Who it affects

The bill directly incentivizes affordable housing construction near transit, which expands housing supply for low-income households, reduces transportation costs for residents, and supports walkable communities. The 50% tax-credit boost makes affordable housing projects financially viable in higher-cost areas, addressing a documented shortage. The geographic cap prevents unlimited sprawl of benefits and the HUD study aims to ensure equitable allocation across regions.

Who stands to gain

• affordable housing developers
• real estate investment trusts (REITs) with housing portfolios
• construction and rehabilitation contractors
• property management companies

Named in the bill

HUD (Department of Housing and Urban Development), Internal Revenue Code Section 42, Low-Income Housing Tax Credit (LIHTC), State housing credit agencies, Metropolitan statistical areas, Hawaii, Alaska, U.S. territories

Where it stands

2 cosponsors: 1 Democrats, 1 Republicans.

• Jun 11, 2026 — Introduced · Congress.gov: “Introduced in House”
• Jun 11, 2026 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.