Across the country, housing costs are steadily rising due to the growing shortage of homes available to sell or rent. With new leadership in key House and Senate committees and provisions of the 2017 Tax Cuts and Jobs Act set to expire, Congress is taking an active role in the fight to develop more homes and lower costs for homebuyers and renters. Here is a breakdown of what is likely to come in the next year within the housing space:
Senate Banking and House Financial Services
Under new leadership of Chairmen Tim Scott, R-SC, and French Hill, R-AR, both the House and Senate are starting with their comprehensive housing package. Last Congress, Scott and Hill introduced the ROAD To Housing Act which enhances several federal housing programs and updates loan products operated by the federal government. At the subcommittee level, Chairman Mike Flood, R-NE, and Ranking Member Emmanuel Cleaver, D-MO, have already announced plans to overhaul the Department of Housing and Urban Development’s (HUD) Community Development Block Grant (CDBG) and HOME Investment Partnerships Program. This plan was also discussed by members in the Senate.
- Rumors are circulating that the Senate will hold a housing markup in June. There’s no shortage of bipartisan housing bills the Senate can consider but the ROAD to Housing Act is likely to be the central component.
- Other bipartisan legislation that may be considered include the Housing Supply Frameworks Act or the Identifying Regulatory Barriers to Housing Act, among others.
House Ways and Means and Senate Finance
With the 2017 Tax Cuts and Jobs Act (TCJA) expiring at the end of 2025, many are hoping to include housing-related priorities in this year’s tax discussions. President Trump has indicated an interest in increasing the state and local tax (SALT) deduction from $10,000, which would help homeowners in high cost areas. Other tax bills housing advocates are pushing to include are the Neighborhood Homes Investment Act, which creates a tax incentive for the development or rehabilitation of affordable owner-occupied homes, the Affordable Housing Credit Improvement Act, which strengthens the low-income housing tax credit and the More Homes on the Market Act, which increases the capital gains exclusion on the sale of a principal residence.
With incredibly narrow margins in the House and a tight window with reconciliation instructions, it’s difficult to envision many provisions other than an increase in the SALT cap being amended this time. That said, there are still provisions that can be extended and protected, like the 1031 like-kind exchange and opportunity zones. As Congress moves forward, both the House and Senate have housing champions throughout the dais, so the conversation does not necessarily end here.
Bottom Line: The House and Senate are under new leadership and the additions to the Banking and Financial Services Committees bode well for the housing industries. Legislation is already being introduced across the political spectrum, from incentives and resources for state and local governments to update zoning requirements, to increases in funding and improvements to housing choice vouchers. There are numerous ideas for how to address the housing affordability crisis, and we can expect these conversations to continue through the 2026 election.
