Workforce Housing Tax Credit Act
Sponsored By: Representative Panetta, Jimmy [D-CA-19]
Introduced
Summary
Creates a new Middle‑Income Housing Credit to encourage private construction and rehabilitation of rent‑restricted housing for middle‑income households. It would tie credit size to a building's eligible basis and offer a 15‑year credit window, with detailed rules on income limits, rent caps, tenant protections, and state allocation.
Show full summary
- Families and tenants: Middle‑income renters could gain more rent‑restricted units targeted at households at or below 100% of area median gross income. Projects must keep at least 60% of units rent‑restricted, may not refuse Section 8 vouchers because of voucher status, and tenants can enforce commitments in state court.
- Developers and investors: Projects would be eligible for a tax credit spread over 15 years. Present‑value rules aim to deliver about 50% of qualified basis for many new, unsubsidized buildings and the bill includes rehab rules and boosts for high‑cost areas.
- State housing agencies and rural areas: States would reserve at least 10% of their credit ceiling for qualified middle‑income projects and can apply a 5% rural increase for projects in non‑metropolitan or designated rural areas. Agencies must use market studies and feasibility tests when allocating credits.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 0 benefits, 0 costs, 3 mixed.
Tax credit for middle-income rentals
If enacted, the bill would create a new Middle‑Income Housing Credit for building owners. You would get a credit each year for 15 taxable years equal to the applicable percentage times the building's qualified basis. The Secretary would set monthly applicable percentages so the 15‑year present value equals 50% of basis for new, non‑federally subsidized buildings and 20% for others, with minimum annual floors (generally at least 5% and 2%). New buildings would use adjusted basis at start of the credit period; existing buildings get eligible basis only after purchase and a 10‑year gap or if major rehab rules are met (24 months and a 20% test). Special at‑risk and nonprofit financing rules apply; some nonprofit loans count as commercial only if secured and repaid by set deadlines, and certain low‑rate loans are adjusted by present value. The bill would reduce a building's tax basis by the credit allowed, add the credit to the BEAT base for corporations, and require first‑year certification and annual reports (penalties apply for late or missing filings).
Tenant protections and rent rules
If enacted, the bill would add tenant protections and rent rules for middle‑income units. Projects could not refuse Section 8 voucher holders because of voucher status. If a tenant's income rises above the limit, the unit can remain middle‑income while rent‑restricted, but if income goes above 140% of the limit the next comparable unit must be rented to a qualifying middle‑income tenant. If a building is foreclosed or no qualified contract is found, existing middle‑income tenants would generally be protected from eviction (except for good cause) and from large rent increases for three years. The Secretary could waive annual tenant income recertifications if the whole building is occupied by qualifying tenants. Small voluntary buyer deposits held toward future purchase would count as gross rent for rent‑limit tests and must be refunded if the tenant leaves, and purchases cannot occur until after the credit period.
State credit ceilings and allocations
If enacted, each State's annual housing credit ceiling would equal unused carryforward plus the greater of $1.00 per resident or $1,500,000, plus returned ceiling amounts. For years after 2026, the $1.00 and $1,500,000 amounts would increase with a cost‑of‑living adjustment (2025 as the base), and the $1,500,000 amount would be rounded down to the nearest $5,000. States would also get an extra amount equal to 5% that can be used only for rural projects. State housing agencies must adopt a qualified allocation plan with developer‑paid market studies, stated selection criteria and priorities, monitoring rules, and limits so allocations only cover amounts needed for financial feasibility. The bill would reserve at least 10% of a State's ceiling for projects involving qualified nonprofits and allow agencies limited transfers of ceiling amounts under set rules.
Sponsors & CoSponsors
Sponsor
Panetta, Jimmy [D-CA-19]
CA • D
Cosponsors
Rep. Carey, Mike [R-OH-15]
OH • R
Sponsored 4/30/2026
Rep. Nunn, Zachary [R-IA-3]
IA • R
Sponsored 4/30/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov