Washington Watch: Policy and Regulatory Outlook for Investors
AHIC Spring Meeting | Scottsdale, AZ | April 21-23, 2026
The Washington Watch panel was moderated by Gina Metrakas-Suber, Vice President and Head of Federal Advocacy at Capital One. Speakers were Peter Lawrence, Chief Public Policy Officer at Novogradac; Ayrianne Parks, Senior Director for Public Policy at Enterprise Community Partners; and Robin Hughes, President and CEO of the Housing Partnership Network.
The session reviewed three active legislative tracks, bank regulatory developments, and disaster resilience policy.
21st Century ROAD to Housing Act
The panel opened with a status update on the 21st Century ROAD to Housing Act, which has passed both the House and Senate with near-unanimous support, with fewer than ten members in each chamber voting against it. Despite that broad backing, the path to enactment is less clear than the vote margins suggest.
The House and Senate passed different versions of the bill, and the chambers are now working through their differences informally rather than through a formal conference process. The Senate has indicated it is not inclined to engage in formal conferencing, leaving staff-level negotiation as the most likely path to reconciliation.
For LIHTC investors, the provisions drawing the most attention are the Public Welfare Investment (PWI) cap increase from 15% to 20%, the permanent reauthorization of the HOME program, and revisions to rural housing programs.
Survey data presented at the session showed that only 6.1% of bank investors are currently at their 15% PWI cap, but the increase is expected to meaningfully expand investor capacity over time as portfolios grow, particularly for institutions that have historically managed close to the limit.
The provision generating the most concern is the one that would require institutional investors holding 350 or more single-family or duplex homes to divest those properties within seven years. The provision has created friction in the industry because many build-to-rent properties, structured as horizontal multifamily on a single parcel, may technically fall within its scope despite functioning as rental communities rather than individually sold homes. And the seven-year sales requirement doesn’t align with the 15-year compliance period for LIHTC.
The Senate passed the provision; the House is under significant pressure from housing industry stakeholders to address it. Panelists noted that President Trump did not insist on the provision, leaving room for it to be modified or removed if the bill is reopened.
A separate concern involves the Build America Buy America provision, which requires projects to use domestically manufactured products. Panelists noted that some products, elevators among them, are not manufactured at scale in the United States, creating feasibility challenges.
At least one developer is considering returning a tax credit allocation due to the financial impact of the requirement. Standalone legislation to address the provision is expected to be introduced.
Affordable Housing Credit Improvement Act
The Affordable Housing Credit Improvement Act (AHCIA) has been introduced six times since 2016 and has accumulated significant bipartisan support, including over 100 co-sponsors in the most recent House introduction. The Action Campaign, the coalition that coordinates advocacy around the bill, is now preparing a revised version for the new Congress.
Planned updates include removing the ten-year rule, which panelists described as an outdated guardrail that has become a meaningful obstacle to re-syndication, particularly for multi-fund investors returning to properties where they were previously involved.
Related party language would also be updated to reflect current market structures. On the investor side, the revised bill is expected to include a proposal to extend the LIHTC carryback period to five years, with bipartisan standalone legislation expected to be introduced shortly.
The bill would also seek to allow investors to apply credits against the corporate alternative minimum tax.
The AHCIA is viewed within the industry as the definitive blueprint for LIHTC legislation, and the Action Campaign is working to maintain a unified industry voice on its provisions before presenting proposals to congressional staff.
Reconciliation 2.0
The panel offered a cautious outlook on a second reconciliation bill. The near-term focus in Congress is on a narrow spending measure to fund two agencies that have been operating under shutdown conditions for more than 50 days. Panelists noted that the narrower the scope of any reconciliation vehicle, the more likely it is to advance, and that attempts to broaden it risk losing the votes needed for passage.
The outlook for meaningful LIHTC provisions in a second reconciliation bill was characterized as uncertain, with the legislative calendar compressed by the 2026 midterm election cycle.
Bank Regulation: CRA and Basel III
The panel expressed measured optimism about ongoing regulatory discussions around the Community Reinvestment Act and the Basel III capital framework. The key data point raised: LIHTC investments have experienced a foreclosure rate of approximately 0.6% over 40 years, among the lowest of any asset class.
Panelists argued this performance record supports a case for lower risk-based capital requirements for affordable housing investments, and encouraged investors to share their own performance data with regulators during any forthcoming comment period.
Disaster Resilience and Insurance
The session addressed the intersection of extreme weather events, insurance markets, and affordable housing stability, with direct reference to the Los Angeles wildfires and the uncertainty facing affected communities about federal recovery resources.
The central policy ask from the panel is permanent authorization for the Community Development Block Grant Disaster Recovery (CDBG-DR) program, which currently requires individual congressional appropriations following each disaster, creating uncertainty that slows community rebuilding and land-use decision-making.
Panelists identified three policy levers they view as necessary in combination: permanent CDBG-DR authorization, state-level insurance market reform, and federal funding for upfront mitigation measures such as fortified roofing and fire-hardening.
The panel noted that data collection and transparency are central to any long-term solution, with the industry needing to demonstrate its risk profile to stabilize insurance availability and pricing. Enterprise has published research on insurance challenges in affordable multifamily housing that the panel pointed to as a resource for practitioners.
Midterm Election Outlook
The panel closed with a brief assessment of the 2026 midterm landscape. A four-seat shift would be sufficient to flip the House, with competitive races in North Carolina, South Carolina, Alaska, Texas, and Ohio identified as ones to watch.
The Senate was characterized as structurally more difficult to shift given that only one-third of seats are up in any cycle and current geography favors Republicans. Panelists expressed general confidence that housing issues would retain bipartisan support regardless of which party controls Congress, though a House flip could shift the committee agenda toward oversight activity rather than new legislation.