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NCSHA Washington Report | June 13, 2025

Published on June 13, 2025

NCSHA Washington Report - 2025Reports of high-cost affordable housing developments in a few of the most expensive cities in America have put a spotlight on the effectiveness of the primary federal incentive for affordable apartments: the Low-Income Housing Tax Credit.

The fact is, the construction costs for the handful of projects featured are not representative of development the credit has financed in those cities or any place else since it was created nearly 40 years ago. The most comprehensive picture comes from two separate studies produced in 2018, which assessed thousands of Housing Credit properties in dozens of states. While costs varied considerably by location, as they do for any type of real estate development, they were largely comparable to market-rate apartment construction overall.

Last month, the Rand Institute did a similar comparative analysis of recent apartment development in California, Colorado, and Texas. While the cost of credit-financed properties was considerably higher than market-rate ones in California, mostly due to excessive local fees and approval delays, the spread wasn’t nearly as great as between the few properties in recent news articles compared to typical costs in those areas. And in Colorado and Texas, the Rand Institute found, credit properties cost less per unit, on average, than other multifamily construction.

While this kind of comparison is appropriate, to a point, it’s important to note that the affordable apartment properties financed by the Housing Credit have to meet a host of cost-increasing requirements and expectations conventional apartment buildings do not.

Local laws and regulations often impose construction hiring, environmental, and approval requirements that drive up expenses. And the federal rules governing the credit require developments to serve very low-income households at restricted rents for decades, which necessitates much higher upfront investments in properties’ physical durability and financial sustainability than market-rate builders have to accommodate.

In some cases, the state agencies that competitively award credits to proposed projects have additional public policy goals that don’t factor into market-rate development, because the agencies are required by law to meet their states’ most pressing housing affordability needs. They include new affordable housing in rural communities far from builders and suppliers, development in desirable suburban areas where land is more expensive, and properties that deliver stability and services to homeless veterans and families, which take more time and subsidies to assemble.

With interest rates and economic uncertainty making all kinds of construction more expensive, states should be, and are, looking for ways to drive lower costs within their authority and in partnership with industry innovators.

The Housing Credit is the most important federal incentive for affordable apartment construction, accounting for more than 3.7 million homes in more than 34,000 properties across the U.S. Researchers have shown that credit-financed properties produce housing at rents well below market, on average, and that credit properties directly benefit nearby homeowners and renters, can help reduce poverty and violent crime, and improve educational and economic prospects for poor children.

With housing affordability needs at all-time highs almost everywhere in America, the Housing Credit is more important and more necessary than ever.

Stockton-Williams-Washington-ReportStockton Williams | Executive Director

In This Issue

Wiessmann Meets with Housing Subcommittee Leaders on HOME Program
On Monday, Robin Wiessmann, executive director and CEO of the Pennsylvania Housing Finance Agency and NCSHA Vice Chair, met with Representatives Mike Flood (R-NE) and Emanuel Cleaver (D-MO), chair and ranking member, respectively, of the House Financial Services Committee’s Housing and Insurance Subcommittee, to discuss the HOME Investment Partnerships Program. The meeting came as a follow-up to the subcommittee leaders’ request for stakeholder input on a potential bipartisan effort to reauthorize and strengthen HOME. During the meeting, Wiessmann highlighted specific priorities for improving HOME, including exempting the program from Build America, Buy America requirements and streamlining the environmental review process. Read NCSHA’s response to the initial request for input on HOME priorities.

Awaiting Senate Tax Bill Language
Senate Finance Committee Chair Mike Crapo (R-ID) hopes to release the text of the Senate version of the tax portion of the reconciliation bill sometime today. As of this writing, it is not yet publicly available. Senate tax writers are considering modifications to the deal the House struck among Republican members on the state and local tax deduction limit, as well as other changes that could impact clean energy tax credits and other aspects of the bill. The expansion of Housing Credit resources included in the House-passed version of the legislation continues to have strong support in the Senate based on NCSHA’s meetings with numerous Senate offices.

HUD Seeks Comments on Affirmative Fair Housing Marketing Requirements
On June 3, HUD issued a proposed rule to rescind its longstanding Affirmative Fair Housing Marketing (AFHM) Regulations, which require certain housing providers to market units broadly to ensure equal access regardless of protected class. HUD argues the regulations are unconstitutional, inconsistent with the Fair Housing Act, and impose unnecessary burdens. Critics contend the move undermines fair housing enforcement and removes protections that help providers defend against discrimination claims. Comments on the proposal are due by July 3. To inform NCSHA’s comments, please email your input to Deborah Yi by June 25.

Secretary Defends HUD Budget Before House, Senate Appropriators
U.S. Department of Housing and Urban Development (HUD) Secretary Scott Turner faced skepticism of his agency’s fiscal year 2026 budget request as he testified before the Transportation, Housing, and Urban Development (THUD) appropriations subcommittees in the House and Senate on Tuesday and Wednesday this week. In the House, THUD Appropriations Subcommittee Chair Steve Womack (R-AR) expressed concern that proposed cuts would “radically affect HUD’s mission and operations” and noted the administration’s proposal to replace HUD’s rental assistance programs with a new state block grant was “light on details.” Senator Chris Coons (D-DE) argued against the administration’s proposed elimination of HOME, reflecting on his own successful experience developing affordable housing with the program while serving as a county executive before being elected to the Senate. Read NCSHA’s analysis of the FY26 budget request in this blog post.

Senate Confirms Hughes as HUD Deputy Secretary
The Senate on Tuesday confirmed Andrew Hughes as deputy secretary of HUD. Hughes, who previously served as chief of staff for HUD Secretary Scott Turner and former HUD Secretary Ben Carson, was approved by a party-line vote of 51 – 43, with all Republicans present voting in support and Democrats present in opposition. Senate Republicans praised Hughes’ experience and expertise, while Democrats expressed concern he would not forcefully push back on Trump Administration efforts to reduce HUD program funding.

In other HUD nominee news, the Senate Banking Committee yesterday held a hearing to consider the nominations of Ben DeMarzo to serve as assistant secretary for congressional and intergovernmental affairs and Craig Trainor as assistant secretary for fair housing.

House Housing Subcommittee Examines Rural Housing Needs
The House Financial Services Subcommittee on Housing and Insurance yesterday held a hearing to delve into the affordable housing challenges rural communities face and to consider possible solutions. In his opening statement, Subcommittee Chair Mike Flood (R-NE) said that, while rural towns face some unique challenges in meeting their housing needs — specifically shortages of materials and labor that can drive up costs, they also are impacted by the same regulatory burdens from federal housing programs that drive up housing costs in more populated areas. Flood said he had identified four major drivers of cost in federal housing programs, which he called “The Four Horsemen of the Housing Apocalypse:” environmental review requirements; Davis-Bacon wage standards; Build America, Buy America mandates; and HUD Section 3 workforce requirements. Ranking Member Emanuel Cleaver (D-MO) agreed with the need to address the affordable housing challenges of rural communities and touted his legislation to reform Rural Housing Service (RHS) programs and create a new multifamily rental housing preservation and revitalization program. He expressed concern about Trump Administration efforts to reduce RHS funding and staffing levels.

Witnesses included Richard Baier of the Nebraska Bankers Association, David Garcia of Up for Growth, Ian Maute on behalf of the Council for Affordable and Rural Housing, and David Lipsetz of the Housing Assistance Council. Garcia, Maute, and Lipsetz all expressed support for the Affordable Housing Credit Improvement Act in their testimonies. In his written testimony, Baier cited research conducted by the Nebraska Investment Finance Authority into the state’s housing needs.

Democratic Senators Send Pulte Letter Voicing Concerns about GSEs Exiting Conservatorship
Senate Minority Leader Chuck Schumer (D-NY), Banking Committee Ranking Member Elizabeth Warren (D-MA), and 12 other Senate Democrats on June 5 sent Federal Housing Finance Agency (FHFA) Director Bill Pulte a letter raising objections to suggestions by President Trump that his administration might reprivatize the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. In the letter, the Senators said reprivatizing the GSEs threatens the stability of the housing market and would increase home buyers’ costs. They asked FHFA to pause any efforts underway to privatize or otherwise alter the GSEs. The letter included eight questions for Pulte regarding FHFA’s plans. The Senators ask Pulte to reply to the questions by June 18 and later to brief them on his responses.

The other signatories were Senate Banking Committee members Tina Smith (D-MN), Raphael Warnock (D-GA), Lisa Blunt-Rochester (D-DE), Catherine Cortez Masto (D-NV), Ruben Gallego (D-AZ), Andy Kim (D-NJ), Chris Van Hollen (D-MD), and Mark Warner (D-VA), as well as Senators Bernie Sanders (D-VT), Mazie Hirono (D-HI), Gary Peters (D-MI), and Ron Wyden (D-OR).

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