U.S. Sens. Todd Young (R-IN) and Maria Cantwell (D-WA) introduced legislation that will spur the construction of some 1.6 million new affordable homes over the next decade.
The Affordable Housing Credit Improvement Act would accomplish this by expanding and strengthening the Low-Income Housing Tax Credit.
Currently, about 11 million families, or roughly 25% of renters, spend more than half of their household income on rent. This cuts into other essential expenses like childcare, medication, groceries, and transportation. In addition, more than 600,000 Americans are homeless — an increase over pre-COVID levels.
“Affordable housing is needed in Indiana and across the country. The Affordable Housing Credit Improvement Act will leverage private sector investment to increase the stock of affordable housing in both urban and rural communities. As a result, this will help to tackle the housing affordability crisis head on to help Hoosier families, expand our workforce, and strengthen our communities,” Young said.
Since it was enacted, the housing credit has built or restored more than 4 million affordable housing units. That accounts for nearly 90 percent of all federally funded affordable housing during that time. Overall, some nine million American households have benefitted from the credit. The economic activity that it generated has supported 6.6 million jobs and spurred more than $746 billion in wages.
“Housing inflation is up 4 percent over the past year nationally and 4.5 percent in the Pacific Northwest – and that was before homebuilders reported an additional 5.5 percent increase in costs due to tariffs this year. We need to do more to lower housing costs for everyone. Expanding and improving the Low-Income Housing Tax Credit will do just that by making it more affordable to build homes and lower rents,” Cantwell said.
Specifically, the Affordable Housing Credit Improvement Act would:
• Increase the number of credits available to states by 50 percent for the next two years and make the temporary 12.5 percent increase secured in 2018 permanent—which has already helped build more than 59,000 additional affordable housing units nationwide.
• Stabilize financing for workforce housing projects built using private activity bonds by decreasing the amount of private activity bonds needed to secure Housing Credit funding. As a result, projects would have to carry less debt, and more projects would be eligible to receive funding.
• Improve the Housing Credit program to better serve veterans, victims of domestic violence, formerly homeless students, Native American communities, and rural Americans.
The bill is cosponsored by Sens. Marsha Blackburn (R-TN) and Ron Wyden (D-OR). A companion bill was also introduced in the House by Reps. Darin LaHood (R-IL), Suzan DelBene (D-WA), Claudia Tenney (R-NY), Don Beyer (D-VA), Randy Feenstra (R-IA), and Jimmy Panetta (D-CA).
The bill has been endorsed by the ACTION Campaign and the Affordable Housing Tax Credit Coalition.
“The overwhelming bipartisan support for the Affordable Housing Credit Improvement Act of 2025 underscores the critical need to increase the supply of affordable rental homes,” said Affordable Housing Tax Credit Coalition CEO Emily Cadik.