The 119th Congress officially convened on January 3, 2025, marking the beginning of a new era in policymaking with significant implications for the nation’s affordable housing landscape. With Republicans controlling both the House of Representatives and the Senate, and a new administration focused on fiscal responsibility, the legislative agenda for the year is expected to center on tax policy, fiscal discipline, and spending priorities. A key area of focus will be the negotiation of a major tax package, likely to include provisions vital for affordable housing development, such as the Low-Income Housing Tax Credit (LIHTC) and tax-exempt Housing Bonds. Texas will be a key player in shaping these discussions, thanks to the strong presence of Texas lawmakers on committees that oversee affordable housing policy.
As the legislative process unfolds, the Trump administration has already set the stage for housing reform
The Trump Administration
On January 20th, 2025, Donald Trump was inaugurated for his second term as the 47th President of the United States. As part of his first actions in office, President Trump signed an executive action focused on delivering emergency price relief – including addressing the housing crisis. This executive order aimed to tackle rising costs and ease the financial burden on American families.
Trump highlighted that regulatory burdens contribute up to 25% of the cost of building a new home, driving up housing prices and making homeownership increasingly out of reach for many Americans. He called this regulatory impact a major obstacle in addressing the housing affordability crisis. Therefore, Trump directed all executive departments and agencies to implement measures to lower the cost of housing and expand housing supply. He also ordered the Assistant to the President for Economic Policy to provide regular updates on the progress of these initiatives, beginning within 30 days.
With the Department of Housing and Urban Development (HUD) playing a central role in these efforts, attention now turns to the confirmation of HUD Secretary Nominee Scott Turner, who will oversee the implementation of these policies.
Senate Banking Committee to Hold Hearing for HUD Secretary Nominee Scott Turner
On January 16, 2025, the Senate Committee on Banking, Housing, and Urban Affairs held a nomination hearing for Scott Turner, President Donald Trump’s pick for HUD Secretary. Turner, a fourth-generation Texan, has experience in public service and community development, including his past role as the head of the White House Opportunity and Revitalization Council. In his introduction, Senator John Cornyn praised Turner for his work on Opportunity Zones, highlighting the program’s bipartisan support and its success in lifting people out of poverty. Turner emphasized that these zones have driven investment in underserved areas, improving housing conditions and raising wages, particularly for minority families.
The hearing provided insight into Turner’s priorities for HUD, including his commitment to regulatory reform and streamlining federal programs. He acknowledged that local regulations, such as zoning laws and permitting fees, are significant barriers to affordable housing development, driving up construction costs. Turner pledged to collaborate with local and state governments to ease these burdens, ensuring that federal programs are effective in addressing the housing shortage. When asked about increasing federal investment in HUD programs, Turner emphasized maximizing existing resources rather than advocating for more funding, underscoring the need for efficiency. As HUD Secretary, Turner committed to taking a comprehensive look at HUD programs to ensure they are truly helping those in need, with a focus on reducing bureaucracy and enhancing program outcomes.
Extension of Tax Cuts and Jobs Act: What it Means for Housing Tax Credits
A key issue that will dominate the legislative agenda in the 119th Congress is the negotiation of a new tax package. Many provisions from the Tax Cuts and Jobs Act (TCJA) of 2017 are set to expire at the end of 2025, and Republicans are expected to use budget reconciliation to fast-track tax legislation through the Senate. Reconciliation allows for the bypassing of the Senate filibuster, but it also requires significant coordination among Republican lawmakers. This approach could expedite the passage of crucial tax incentives that support affordable housing development, particularly the Low-Income Housing Tax Credit (LIHTC), which has been instrumental in financing the development of affordable housing nationwide.
However, the narrow Republican majority in the House presents challenges. Party discipline will be crucial for passing the necessary budget resolution to trigger reconciliation. Given the concerns over deficit spending, especially from fiscal conservatives, there is likely to be significant debate over how to balance fiscal responsibility with the need for continued support for affordable housing incentives. Republicans are divided over whether to pursue one large reconciliation bill that includes both tax and immigration measures or to separate the issues into two distinct packages. While House Speaker Mike Johnson and Chairman Jason Smith of the Ways and Means Committee support the former approach, Senate Majority Leader John Thune has expressed a preference for two separate bills.
Texas’ Critical Role in Affordable Housing Legislation
Texas, with its diverse and rapidly growing population, plays a central role in shaping national housing policy. The state is represented by 38 congressional delegates, including 13 Democrats and 25 Republicans. This diverse delegation ensures that Texas will be a key player in the debates surrounding tax policy, federal spending, and housing priorities.
In the 119th Congress, Texas will continue to have a strong presence in committees that directly affect housing policy. 15 Texas members currently sit on committees that focus on housing, including the House Ways and Means Committee, the House Financial Services Committee, and the House Appropriations Committee. Senator John Cornyn, a key figure on the Senate Finance Committee, is particularly influential in tax-related matters, including provisions impacting affordable housing.
New Faces in Texas’ Congressional Delegation
In addition to familiar faces, the 119th Congress sees the introduction of four new Texas members in the U.S. House of Representatives.
- Craig Goldman (R): Representing District 12, which includes parts of Fort Worth and surrounding counties, Goldman succeeds longtime Representative Kay Granger, who announced her retirement after nearly three decades in office. Goldman, a former member of the Texas House of Representatives, previously served as the Chair of the Texas House Energy Resources Committee.
- Julie Johnson (D): Johnson, a Democrat from District 32, made history by becoming the first openly LGBTQ+ person from Texas and the South to serve in Congress. Previously a member of the Texas House, Johnson represents a suburban district in northeastern Dallas County.
- Brandon Gill (R): Gill, a political newcomer, won the election for District 26, which spans from suburban Dallas to the Oklahoma border. Gill, a former Wall Street executive, was elected after a competitive primary battle following the retirement of longtime Rep. Michael Burgess. His background in finance could give him valuable insights into housing and economic policy.
- Sylvester Turner (D): Turner, the former Mayor of Houston, has been elected to represent District 18. He replaces the late Sheila Jackson Lee, who passed away in 2024. Turner’s eight years as mayor of Houston, Texas’ largest city, make him an important voice on urban policy, housing, and infrastructure.
Staffing Assignments Announced for Key Housing Committees in New Congress
As the new Congress begins, staffing assignments for key committees responsible for federal housing and homelessness policy have been announced. These committees play a crucial role in shaping legislation that impacts affordable housing, homelessness programs, and funding for vital housing initiatives across the nation. With the Housing Credit, tax-exempt Housing Bonds, and appropriations for housing programs all in focus, the makeup of these committees will be instrumental in determining the future of U.S. housing policy.
The Ways and Means Committee
The House Ways and Means Committee holds significant jurisdiction over tax-related issues, including the Low-Income Housing Tax Credit (Housing Credit) and tax-exempt Housing Bonds, both of which are vital tools in financing affordable housing across the country. The committee is central to discussions on tax policy, and this session’s tax legislation includes provisions aimed at bolstering affordable housing production.
In 2024, the Ways and Means Committee marked up and passed bipartisan tax legislation, The Tax Relief for American Families and Workers Act of 2024 (H.R. 7024), which includes key provisions that directly benefit affordable housing:
- Restoring the 12.5 percent allocation increase for the Housing Credit for 2023–2025.
- Lowering the 50 percent bond financing threshold to 30 percent for 2024–2025, expanding access to crucial funding for housing projects.
Rep. Mike Kelly (R-PA), Chairman of the Ways & Means Subcommittee on Tax, led the committee’s recent site visit to Northwest Washington, D.C., to examine the role of tax credits in promoting housing affordability. The visit underscored the Housing Credit’s significant impact since its establishment in the 1986 tax reform law.
Key Members:
* New Member
- Chair: Rep. Jason Smith (MO)
- Texas Majority Members:
- Jodey Arrington – District 19.
- Beth Van Duyne – District 24 (AHCIA Co-Sponsor)
- Nathaniel Moran* – District 1
- Texas Minority Member:
- Lloyd Doggett – District 37
The Subcommittee on Tax, which deals with tax-related issues referred by the full committee, is chaired by Rep. Mike Kelly (PA), with Rep. Jodey Arrington and Rep. Beth Van Duyne also serving on the subcommittee.
House Appropriations Committee
The House Appropriations Committee has jurisdiction over federal spending, including funding for the Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture housing programs. This committee plays a pivotal role in determining how much funding will go to housing programs, impacting everything from affordable housing development to homelessness prevention.
In particular, the Subcommittee on Transportation, Housing and Urban Development, and Related Agencies is critical in determining funding levels for HUD’s wide-ranging programs.
Key Members:
* New Member
- Chair: Rep. Tom Cole (OK)
- Texas Majority Members:
- John Carter – District 31
- Tony Gonzales – District 23 (AHCIA Co-Sponsor)
- Michael Cloud – District 27
- Jake Ellzey – District 6
- Texas Minority Members:
- Henry Cuellar – District 28 (AHCIA Co-Sponsor)
- Veronica Escobar* – District 16
The members of the Transportation, Housing and Urban Development, and Related Agencies Subcommittee have not yet been fully disclosed for the 119th Congress. For the 118th Congress, Rep. Steve Womack of Arkansas served as chair, and Rep. Tony Gonzales (TX) was a subcommittee member.
House Financial Services Committee
The House Financial Services Committee oversees many aspects of the housing and financial services sectors, including banking, insurance, public and assisted housing, and securities. This committee also ensures the enforcement of housing and consumer protection laws. It plays a key role in shaping policies around government-sponsored enterprises like Fannie Mae and Freddie Mac, as well as HUD and Ginnie Mae.
The Subcommittee on Housing and Insurance handles housing affordability, rural housing, and community development issues, as well as government-sponsored insurance programs like the Federal Housing Administration (FHA) and the National Flood Insurance Program.
Rep. Mike Flood (R-NE) has been named chair of the Subcommittee on Housing and Insurance, after demonstrating a strong interest in housing issues last Congress. Monica De La Cruz from Texas will serve as Vice Chair.
Key Members:
- Chair Committee: Rep. French Hill (AR)
- Texas Majority Members:
- Pete Sessions – 17 (AHCIA Co-Sponsor)
- Roger Williams – District 25 (AHCIA Co-Sponsor)
- Monica De La Cruz – District 15 (AHCIA Co-Sponsor)
- Texas Minority Members:
- Al Green – District 9
- Vicente Gonzalez – District 34
- Sylvia Garcia – District – 29
Senate Finance Committee
The Senate Finance Committee holds jurisdiction over tax-related matters and plays a critical role in determining federal tax policy, including provisions related to the Low-Income Housing Tax Credit (LIHTC). As the chief tax-writing committee in the Senate, it is instrumental in shaping tax legislation, including those provisions related to housing affordability.
Senator John Cornyn (R-TX) remains a key figure on the Senate Finance Committee, which is crucial for advancing housing tax incentives, including those related to the Housing Credit.
Senate Appropriations Committee
The Senate Appropriations Committee determines the amount of funding for federal programs each year, including those under the Department of Housing and Urban Development. The Transportation, Housing, and Urban Development (THUD) Subcommittee is responsible for allocating funding for HUD programs, including public housing, fair housing, and Indigenous housing initiatives.
While no Texas Senators are currently serving on the Senate Appropriations Committee, the THUD Subcommittee will continue to be a central player in funding housing programs in the coming years.
Senate Banking Committee
The Senate Banking, Housing, and Urban Affairs Committee oversees policies related to housing, urban development, financial institutions, and economic policy. The committee’s Subcommittee on Housing, Transportation, and Community Development has primary oversight of HUD and community development programs, including those related to Fannie Mae and Freddie Mac, rural housing, and public housing.
Although no Texas Senators are currently serving on the Senate Banking Committee, this committee will remain a key player in the legislative process for affordable housing and homelessness policies.
Anticipated Tax Legislation
As the new Congress tackles tax policy, several critical provisions are set to expire, and discussions around tax reform are expected to accelerate. Many of the provisions from the Tax Cuts and Jobs Act (TCJA), which was passed in 2017, are slated to expire at the end of this year, creating a sense of urgency for lawmakers.
- Tax Provisions Set to Expire: Among the TCJA provisions set to sunset are those affecting individual and corporate tax rates, deductions, and tax credits. Republicans are planning to use budget reconciliation to fast-track tax legislation and bypass the Senate filibuster, allowing them to make these changes with a simple majority vote.
- Budget Resolution: The narrow Republican majority in the House will require strong party discipline to pass a budget resolution. Deficit hawks within the party are expressing concerns over spending limits and the cost of extending TCJA provisions. Once the budget resolution is passed, Republicans must finalize policy details and ensure the tax bill complies with Senate parliamentarian rules for reconciliation.
- Reconciliation Debate: Republicans are divided over whether to pursue two separate reconciliation bills—one for immigration and border security and another for tax reform, or to combine both into a single package.
- Chairman Jason Smith (House Ways & Means Committee) and Speaker Mike Johnson support moving forward with a single reconciliation bill, aiming to pass it by Memorial Day as part of President-elect Trump’s agenda.
- President-elect Trump has expressed support for the single-bill strategy but remains open to the possibility of two separate bills.
- Senate Majority Leader John Thune (R-SD) favors the two-bill strategy.
AHCIA Reintroduction Forthcoming
The Affordable Housing Credit Improvement Act (AHCIA) will likely be reintroduced in the new Congress. This bill has garnered significant support across both parties, with key members of Congress from various ideological backgrounds championing it. The reintroduction will include a renewed effort to expand cosponsorship and explore potential modifications to the bill.
Recap of the AHCIA of 2023 (H.R. 3238 / S. 1557):
- The 2023 AHCIA was introduced in the House with 66 original cosponsors, including six lead sponsors, evenly split between Republicans and Democrats. By the end of 2024, it boasted 274 cosponsors, including 12 committee chairs and 80% of the Ways and Means Committee, making it the most cosponsored tax bill in the House.
- In the Senate, S. 1557 had 35 cosponsors, including more GOP cosponsors than in any previous Congress. It also had bipartisan support, including 24 Democrats who expressed support for the bill but were not officially listed as cosponsors to maintain party parity.
- Texas AHCIA Cosponsors (10): Rep. Beth Van Duyne, Rep. Monica De La Cruz, Rep. Greg Casar, Rep. Roger Williams, Rep. Lance Gooden, Rep. Tony Gonzales, Rep. Pete Sessions, Rep. Henry Cuellar, Rep. Collin Allred, Rep. Lizzie Fletcher. Note: Rep. Collin Allred will not return for the 119th Congressional Session.
Thompson to Step Down as FHFA Head
Sandra Thompson, Director of the Federal Housing Finance Agency (FHFA), will resign on January 19, marking the end of nearly 3.5 years of leadership. Thompson, who took over as acting director in 2021 and was confirmed as permanent director in 2022, has been a strong advocate for affordable housing and expanding access to Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. It is expected that President-elect Donald Trump will soon appoint a new FHFA Director following Thompson’s resignation.