Sponsor
Patrick Ryan
Representative · D-NY
Representative · D-NY
The bill aims to expand and preserve affordable housing—especially for working families and rural communities—by expanding tax credits, tenant protections, and infrastructure support, but it does so at the cost of significant federal revenue, added administrative complexity, and risks of higher project costs or uneven local access.
Low- and moderate-income renters and working families gain more affordable housing as the bill expands and strengthens tax credits and other incentives to build and preserve units.
Owners and developers of qualifying projects can access a more generous, predictable tax credit (including a 15‑year refundable structure and a new Working Families Housing Tax Credit), lowering financing costs and encouraging new affordable projects.
Rural and exurban communities gain federal grants and low‑cost loans for electricity, water, sewer, and access-road infrastructure, and prioritized clean-energy upgrades, making it easier to build working‑family housing outside metro cores.
Federal revenue will decline as expanded and strengthened tax credits and new credits reduce tax bases and increase outlays, putting upward pressure on deficits or requiring offsets elsewhere.
Developers, state agencies, Treasury/IRS, and housing partners will face substantial new compliance, reporting, and administrative burdens—raising transaction costs, slowing approvals, and increasing staffing needs.
Prevailing‑wage‑type requirements and stricter labor/ownership rules can raise construction costs, which may reduce the number of financed units or be passed to tenants as higher rents.
Based on analysis of 6 sections of legislative text.
Adds a new Working Families Housing Tax Credit (IRC §42A), limits state LIHTC allocations to favor nonprofit‑led projects, and authorizes $100M for rural/exurban infrastructure tied to qualifying projects.
Official title: To amend the Internal Revenue Code of 1986 to provide a credit for working families housing development, and for other purposes.
Introduced January 31, 2025 by Patrick Ryan · Last progress January 31, 2025
Creates a new federal Working Families Housing Tax Credit (added as section 42A of the Internal Revenue Code) to subsidize production of housing for teachers, first responders, veterans, and other workers, and adjusts how that credit interacts with existing low-income housing tax credit rules. The bill also limits how state housing credit allocations may be used, requires nonprofit ownership and material participation for most qualifying projects, and authorizes $100 million in grants and below‑market loans for rural and exurban infrastructure tied to qualifying projects. The new credit is computed using an applicable percentage times a qualified basis for each qualified working families building, includes rules on present-value percentage setting and minimum floors, and creates compliance requirements (recorded restrictive covenants and enforceable commitments). Conforming changes to the tax code and coordination with HUD are required; the tax changes apply to buildings placed in service after December 31, 2025.