With a holiday recess and possible government shutdown teed up for next month the House Committee on Financial Services is moving to advance the Housing for the 21st Century Act, which adds another weapon in the battle to develop more affordable housing.
"What we're doing today is we're marking up bills that will reduce regulatory cost of building new houses, improve zoning to encourage better density and different kinds of units across cities in the U.S.," said Committee Chairman French Hill R-Ark.
The bill also includes a proposal to increase the public welfare investment cap from 15% to 20%. The PWI limits how much banks can invest in community development projects and is regulated by the Office of the Comptroller of the Currency, an independent bureau operating in the U.S. Treasury Department.
The bill is more good news for the affordable housing sector that relies on Low Income Housing Tax Credits and private activity bonds to finance affordable housing communities.
"Raising the PWI cap will free additional private sector investment to support affordable housing development using the Housing Credit, the nation's most successful tool for producing affordable rental housing," said Emily Cadik, CEO of the Affordable Housing Tax Credit Coalition.
"As the nation's affordable housing crisis continues to impact American families and communities, we urge the House of Representatives to consider this legislation for immediate passage."
The sole committee dissenter to the legislation is Rep. Ralph Norman, R-S.C. who typically opposes any bill that contains earmarks or strays from fiscal conservatism.
The PWI cap has not been raised since 2006 when it went from 10% to 15%. The bump opened up a gusher of investment with national bank PWIs growing from $3.1 billion in 2005 to $27.9 billion in 2024.
The cap plays a key role in tapping LIHTC's which are viewed by the industry as the key chip in any capital stack needed to fund affordable housing development.
"The Housing Credit accounts for roughly 80% of national bank public welfare investments, and there are a significant number of banks limited in their ability to invest in the Housing Credit because of the PWI cap," said Dudley Benoit, president of the AHTCC board of directors and senior managing director at Walker & Dunlop.
"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."
Housing has emerged as a key bipartisan, bicameral area of interest in Congress as the Senate passed their version of a housing bill in
