Accessibility LIHTC expansion

Summary#

This bill changes the federal low-income housing tax credit (LIHTC) to push more affordable housing to be accessible for older adults and people with disabilities. It raises the amount of tax credit each State gets. It gives extra credit value for buildings that set aside many accessible units in walkable areas. It also requires State allocation plans to direct a set share of credits to accessible units.

• Main change: Raises the per-person and minimum State LIHTC allocations starting in 2026.
• Main change: For buildings where at least half the low-income units are designated as accessible, the tax credit-eligible basis for that portion is increased to 150% (which raises the tax credit amount).
• Main change: State qualified allocation plans must ensure at least 40% of LIHTC-funded low-income units over any 3-year period are designated to serve households with people with disabilities.
• Design rule: “Accessible” follows the Uniform Federal Accessibility Standards (or a successor standard).
• Timing: The allocation increases start for calendar years after Dec 31, 2025. The credit boost and allocation-plan rules apply to projects or plans adopted after Dec 31, 2026.

What it means for you#

• People with disabilities and older adults

  • Could see more affordable rental units built with accessible features (wider doors, zero-step showers, etc.) if States use the new incentives.
  • Could benefit when such units are placed in walkable neighborhoods that allow easier access to shops, transit, and appointments.

• Low-income renters

  • More LIHTC dollars could mean more affordable housing is built overall. The bill targets a portion specifically for units meeting accessibility standards.

• Developers of affordable housing

  • Projects that commit at least half of their low-income units to meet the stated accessibility standards and are in qualifying walkable areas may receive a larger LIHTC (through a 150% eligible basis boost). That makes financing these projects easier.
  • Developers will have to meet the accessibility design standards and documentation requirements set by housing credit agencies.

• State housing agencies

  • Must change their qualified allocation plans to meet the new 40% target over any 3-year period. They will also decide when a “credit increase” is required to make a building feasible.
  • Will need to track and report which units count toward the 40% and enforce the new requirements.

• Communities / neighborhoods

  • The bill favors projects in census block groups the EPA labels as “above average” in walkability or adjacent to two such tracts. This pushes accessible affordable housing toward more walkable areas.

• Federal taxpayers

  • The federal government will provide larger LIHTC allocations to States, which reduces federal revenue compared with current law (see Expenses).

Expenses#

No publicly available information on a fiscal estimate or formal cost projection is included with the bill text.

• The bill increases the LIHTC per-capita and minimum State allocations. That change would likely raise federal tax expenditures (i.e., reduce federal revenue) because more credits would be allocable to States.
• State housing agencies may incur administrative costs to change plans, monitor compliance, and issue designations.
• Developers may face higher upfront costs to build to the accessibility standard. The extra credit (150% basis) is intended to offset those costs, but the bill does not include a cost-benefit estimate.
• The bill does not provide a numeric federal budget estimate or savings.

Proponents' View#

• The bill appears intended to increase the supply of affordable housing that is accessible to people with disabilities and older adults.
• It aims to direct more LIHTC dollars to units that meet accessibility standards and to place those units in walkable neighborhoods.
• Increasing State LIHTC allocations and boosting the eligible basis for qualifying projects could make more accessible projects financially feasible.
• Requiring a minimum share (40% over three years) in State plans would create a steady, measurable push toward accessible housing.

Opponents' View#

• One concern is higher federal tax expenditures. The bill raises per-capita and minimum allocations but provides no fiscal estimate in the bill text.
• The 40% target could be hard to meet in some States, especially where land, construction costs, or available walkable sites are limited. This may slow other LIHTC priorities.
• The rule that counts units “twice” when a project meets both accessibility and location tests could skew allocations or lead to unexpected targeting outcomes.
• It is unclear who decides a project “requires” the increased credit to be financially feasible, and that discretion could vary across housing agencies.
• The bill relies on the Uniform Federal Accessibility Standards (UFAS) or a “successor standard.” UFAS is older than some current standards; the bill does not specify how updates or differences between standards will be handled.
• The EPA “walkability” label is used as a siting test. The bill does not explain how frequently EPA designations will be updated or how edge cases (adjacent tracts, borderline scores) are handled.

What is unclear from the bill text

• The bill does not include a fiscal note or estimated cost to the federal budget.
• It does not define which Secretary can name a successor to the accessibility standard, and how that successor would be chosen.
• The process and criteria a housing credit agency must use to decide that a credit increase is needed for a project’s financial feasibility are not specified.
• How States must document and verify units that count toward the 40% target is not detailed.