Transit Oriented Development Act of 2026

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9267 Introduced in House (IH)]

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119th CONGRESS
  2d Session
                                H. R. 9267

  To amend the Internal Revenue Code of 1986 to modify the low-income
   housing tax credit to incentivize affordable and transit-oriented
development and development in certain difficult development areas, and
                          for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             June 11, 2026

   Mr. Case (for himself, Mr. Moylan, and Ms. Tokuda) introduced the
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL

  To amend the Internal Revenue Code of 1986 to modify the low-income
   housing tax credit to incentivize affordable and transit-oriented
development and development in certain difficult development areas, and
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Transit Oriented Development Act of
2026''.

SEC. 2. LOW-INCOME HOUSING TAX CREDIT FOR TRANSIT-ORIENTED DEVELOPMENT
              AREAS.

    (a) In General.--Section 42(d)(5) of the Internal Revenue Code of
1986 is amended by adding at the end the following new subparagraph:
                    ``(C) Increase in credit for buildings in transit-
                oriented development areas.--
                            ``(i) In general.--In the case of any
                        building located in a transit-oriented
                        development area which is designated for
                        purposes of this subparagraph--
                                    ``(I) in the case of a new
                                building, the eligible basis of such
                                building shall be 150 percent of such
                                basis determined without regard to this
                                subparagraph, and
                                    ``(II) in the case of an existing
                                building, the rehabilitation
                                expenditures taken into account under
                                subsection (e) shall be 150 percent of
                                such expenditures determined without
                                regard to this subparagraph.
                            ``(ii) Increased eligible basis for
                        noncontiguous states and territories.--In the
                        case of a transit-oriented development area in
                        Hawaii, Alaska, or any territory of the United
                        States, subclauses (I) and (II) of clause (i)
                        shall each be applied by substituting `155
                        percent' for `150 percent'.
                            ``(iii) Transit-oriented development
                        area.--For purposes of this subparagraph, the
                        term `transit-oriented development area' means
                        an area designated by the Secretary of Housing
                        and Urban Development and State housing credit
                        agency as located in an area within \1/2\ of a
                        mile from a rail, bus, harbor, or waterway
                        station and as zoned for high-density.
                            ``(iv) Limit on areas designated.--The
                        portions of metropolitan statistical areas
                        which may be designated for purposes of this
                        subparagraph shall not exceed an aggregate area
                        having 20 percent of the population of such
                        metropolitan statistical areas. A comparable
                        rule shall apply to nonmetropolitan statistical
                        areas.
                            ``(v) Coordination with high cost areas.--
                        If the eligible basis of a new building, or the
                        rehabilitation expenditures with respect to an
                        existing building, are determined pursuant to
                        subparagraph (B), such building shall not be
                        treated as located in a transit-oriented
                        development area for purposes of this
                        subparagraph.''.
    (b) Effective Date.--The amendment made by this section shall apply
to buildings placed in service after the date of the enactment of this
Act.

SEC. 3. HUD STUDY REGARDING ADJUSTMENT OF TAX CREDIT ALLOCATIONS TO
              REFLECT GEOGRAPHIC COST-OF-LIVING DIFFERENCES.

    The Secretary of Housing and Urban Development shall conduct a
study to identify cost-of-living differences throughout the United
States based on geographic location and proximity and accessibility to
transit. Not later than the expiration of the 1-year period beginning
on the date of the enactment of this Act, the Secretary shall submit a
report to the Congress setting forth the results and conclusions of the
study and recommending formulas for the adjustment of annual
allocations to the States of low-income housing tax credits under
section 42 of the Internal Revenue Code of 1986 to reflect such cost-
of-living differences.
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