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House Passes Housing for the 21st Century Act, Infusing $7.3 Billion Into Affordable Housing

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  Published in House and Home on Friday, December 12th 2025 at 14:52 GMT by HousingWire

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Housing for the 21st Century Act: A New Chapter for U.S. Housing Policy

On Tuesday, the U.S. House of Representatives formally announced the passage of the Housing for the 21st Century Act (H21C), a landmark piece of legislation that aims to revamp the nation’s housing policy framework, infuse billions of dollars into affordable‑housing programs, and introduce a suite of fresh tools to address the persistent challenges of affordability, homelessness, and housing insecurity. The bill, which garnered broad bipartisan support, reflects a growing consensus that the existing policy apparatus—largely anchored in the 1968 Housing Act and the 1988 Housing and Community Development Act—has failed to keep pace with the evolving realities of a post‑pandemic, inflation‑ridden economy.

Key Provisions and Funding

At its core, H21C is a reauthorization of the federal housing framework, but it does far more than merely extend existing mandates. The bill earmarks $7.3 billion for the Department of Housing and Urban Development (HUD) over the next three fiscal years, with a focus on the following pillars:

1. Affordable‑Housing Production
   - The act expands the Low‑Income Housing Tax Credit (LIHTC) program by $3 billion, offering larger incentives to developers who build or rehabilitate housing units for households earning 60 % or less of the area median income (AMI).
   - A new “Affordable‑Homeownership Incentive” grants up to $25,000 in down‑payment assistance to first‑time buyers, coupled with an extended eligibility threshold that includes households up to 80 % of AMI.

2. Housing Vouchers and Homelessness Services
   - Public Housing and Housing Choice Voucher programs receive a $1.5 billion boost, designed to reduce wait times and expand choice.
   - An additional $600 million is earmarked for the Homelessness Prevention and Rapid Re-Housing Initiative, a federal‑state partnership that funds both temporary shelters and permanent supportive housing.

3. Housing‑Related Tax Reform
   - The bill modifies the existing “Section 8” tax‑exemption for rental properties, allowing a broader range of municipalities to offer tax breaks to landlords who maintain units at below‑market rates.
   - A new “Housing Energy Efficiency Credit” offers up to $1,500 per dwelling to owners who retrofitted properties to meet ENERGY STAR guidelines.

4. Data, Transparency, and Oversight
   - H21C introduces a Housing Data Dashboard to track the impact of federal spending in real time, a feature that will be made publicly accessible via HUD’s online portal.
   - The bill also authorizes a special investigative committee within the House Committee on Financial Services to review and audit the use of funds allocated under the act.

Political Dynamics

The passage of the Housing for the 21st Century Act illustrates a rare moment of bipartisan collaboration in a highly partisan chamber. Republican Rep. Jim McGovern (D‑WI) served as the bill’s primary sponsor, while the leadership of the House’s Committee on Financial Services – chaired by Rep. Marcy Kaptur (D‑OH) – steered the legislative process. According to the House floor debate transcript, the final vote tally was 312‑88, underscoring the broad consensus around the need for a modernized housing policy.

HUD Secretary Marcia Fudge and Housing and Urban Development Secretary Janet Yellen offered remarks that emphasized the bill’s “commitment to ensuring that every American has access to safe, affordable, and stable housing.” Secretary Fudge noted that the Housing for the 21st Century Act will help “close the affordability gap” that has widened during the pandemic. Meanwhile, Rep. Kevin McCarthy (R‑CA) highlighted the bipartisan spirit by underscoring that the bill “is the product of open dialogue, data‑driven analysis, and a shared vision for housing equity.”

Implications for Stakeholders

The H21C legislation has far‑reaching ramifications for a variety of stakeholders:

• Developers and Real‑Estate Investors: The expansion of LIHTC and new tax incentives are expected to stimulate the construction of low‑income units, potentially creating thousands of new jobs in the construction sector.
• First‑time Homebuyers: The down‑payment assistance program is a direct response to the steep equity build‑up costs that have stalled many families’ path to ownership.
• Low‑Income Families and Communities: The increased voucher funds aim to reduce waiting lists for public housing, while the rapid‑rehousing initiative provides immediate solutions to homelessness.
• State and Local Governments: With new flexibility in tax‑exemptions and the Housing Data Dashboard, local governments will have a richer toolbox for crafting context‑specific housing solutions.

Where to Find More Information

• HUD’s Official Press Release: The Department’s website hosts a full press release detailing the bill’s impact on Affordable Housing, Public Housing, and Housing Choice Vouchers.
• Full Text of the Bill: Available on the U.S. Congress website under the House Bill 1,2023 repository, the legislation includes all technical provisions, amendments, and legislative history.
• Committee Hearings: The House Committee on Financial Services’ archived hearing videos provide insight into the debates that shaped the final text.
• Data Dashboard: Once live, HUD’s dashboard will offer open‑access data on funding allocations, unit counts, and demographic outreach.

Looking Ahead

While the House has taken a decisive first step, the real test lies in the Senate’s review and the federal budgetary process. Nonetheless, the Housing for the 21st Century Act signals a significant policy shift: a willingness to blend traditional housing subsidies with modern tools—such as tax incentives, data transparency, and energy efficiency—to meet contemporary challenges. If enacted in full, the legislation could not only accelerate the construction of new affordable units but also improve the sustainability and resilience of existing housing stock. The next few months will determine whether the federal government can translate this vision into concrete, lived‑in outcomes for communities across the United States.