Low Income Housing for Defense Communities Act

Bill Number

H.R. 308

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-01-09: Referred to the House Committee on Ways and Means.

Last Updated

2025-08-27T08:05:20Z

AI-Generated Summary

Purpose

The "Low Income Housing for Defense Communities Act" (H.R. 308) aims to make affordable rental housing more accessible to members of the U.S. Armed Forces by providing tax incentives. It excludes military housing allowances from income calculations for certain housing programs and boosts tax credits for developments near major military bases. A "Sense of Congress" section expresses support for broader efforts to increase affordable housing nationwide, referencing the Affordable Housing Credit Improvement Act of 2023.

Key Provisions

• Exclusion of Military Housing Allowance from Income Limits:
• Under the Low-Income Housing Tax Credit (LIHTC) program, the Basic Allowance for Housing (BAH)—a payment to service members under U.S. law—will not count as income when determining eligibility for low-income rental projects.
• Similarly, for tax-exempt bonds used to finance qualified residential rental projects, BAH payments are excluded from income calculations.
• These changes apply to income determinations made after the bill's enactment.

• Enhanced Tax Credits for Housing Near Military Bases:
• Buildings within 15 miles of a "large military installation" (defined as one with a total plant replacement value over $2.833 billion, as determined by the Secretary of Defense) will be treated as in a "difficult development area." This qualifies them for higher LIHTC amounts to offset higher construction costs.
• The enhanced credit applies to buildings placed in service after enactment.
• No requirement exists that these buildings house only military members; they can serve other low-income residents.

Significant Changes to Existing Law

• Amends Section 42(i) of the Internal Revenue Code (IRC) to add a new paragraph excluding BAH from income for LIHTC purposes, helping military families qualify as "low-income" despite receiving this allowance.
• Modifies Section 142(d) of the IRC for tax-exempt bonds by adding a clause to exclude BAH from income limits and removing outdated (or "deadwood") clauses that are no longer relevant.
• Updates Section 42(d)(5)(B) of the IRC to automatically designate areas near large military bases as difficult development areas, increasing the applicable tax credit percentage without needing separate federal designation. This simplifies the process for developers.

Potential Impacts

• On Citizens: Military families may gain better access to affordable rentals, reducing housing cost burdens near bases. Broader low-income residents near military areas could also benefit from increased housing supply.
• On Government Agencies: The Internal Revenue Service (IRS) and Department of the Treasury will need to update guidance and administer the revised tax rules. The Department of Defense will provide data on large installations' values.
• On Local Communities: Areas around major bases (e.g., those with high-value infrastructure) could see more investment in rental housing, potentially boosting local economies but straining infrastructure if development surges.
• No direct impacts on international relations are evident, as the bill focuses on domestic tax policy for U.S. military personnel.

Main Stakeholders Affected

• Members of the Armed Forces: Primary beneficiaries, as the changes help them qualify for subsidized housing without BAH counting against income limits.
• Housing Developers and Investors: Gain tax advantages (e.g., higher credits and bond financing) to build or rehabilitate rentals near bases, encouraging private investment.
• Low-Income Communities Near Military Installations: Indirectly benefit from expanded affordable housing options, including for non-military residents.
• Federal Agencies: IRS for tax enforcement; Department of Defense for defining large installations; state housing agencies that allocate LIHTC.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens the LIHTC program (a key tool for affordable housing since 1986) by tailoring it to military needs, potentially reducing litigation over income exclusions. The bill's effective dates ensure a clear transition without retroactive effects.
• Constitutional: No apparent challenges; it aligns with Congress's taxing and spending powers under Article I, supporting the military without favoring specific groups in a way that violates equal protection.
• Political: Bipartisan introduction (by Rep. Moore of Utah and Rep. Strickland) signals broad support for military housing. It promotes housing equity in defense-heavy regions, which could influence future tax reform debates, but ties into larger affordable housing pushes without mandating them.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Moore, Blake D. [R-UT-1]

Cosponsors (3)

Rep. Strickland, Marilyn [D-WA-10], Rep. Lee, Susie [D-NV-3], Rep. Gottheimer, Josh [D-NJ-5]

Recent Actions

• 2025-01-09: Referred to the House Committee on Ways and Means.
• 2025-01-09: Introduced in House
• 2025-01-09: Introduced in House

Bill Versions

• Low Income Housing for Defense Communities Act — issued 2025-01-09 — PDF (4 pages)