4. Affordable Housing Tax Credits Get a Boost

While much of the tax bill focuses on homeowners, renters may also feel the effects through expanded affordable housing incentives.

Expanded Low-Income Housing Tax Credit (LIHTC)

The BBB increases funding for the Low-Income Housing Tax Credit, a key incentive that encourages private developers to build and renovate affordable rental housing.

Starting in 2026:

• State housing credit allocations increase from 9% to 12%
• The bond financing threshold drops permanently from 50% to 25%

These changes make it easier and more profitable for developers to finance affordable housing projects.

Over time, this could help ease rental shortages, stabilize rent prices, and create more affordable options for families priced out of homeownership due to high mortgage rates and limited housing supply.