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Big Shifts in Affordable Housing: What the New OBBBA Brings

This week at IGC:
Big Shifts in Affordable Housing: What the New OBBBA Brings
Impact Firm Targets $2B Investment to Transform U.S. Commercial Real Estate
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Affordable Housing News
Big Shifts in Affordable Housing: What the New OBBBA Brings
We’ve been tracking the One Big Beautiful Bill Act, and now that it’s passed, it’s time to dig into what it means for the affordable housing landscape. From our perspective, this reshapes key levers of affordable housing finance. Between the expanded LIHTC provisions, long-term Opportunity Zone authorization, and subtle shifts to Section 8, there’s real signal here for tax-advantaged deals and long-term demand trends.
At the same time, not everything in the bill leans toward growth. There are trade-offs—especially in how public housing and social support programs are being recalibrated. In this breakdown, we’ve outlined the provisions we think matter most.
Expansion of the Low-Income Housing Tax Credit (LIHTC)
Perhaps the biggest win for developers:
12% Permanent Increase in the 9% LIHTC allocation starting 2026.
Lower Threshold: The required private activity bond financing for 4% LIHTC projects drops from 50% to 25%.
This change is projected to add or preserve over 1 million affordable rental units by 2035, opening a massive runway for new revitalization efforts.
Permanent Authorization of Opportunity Zones
The bill makes Opportunity Zones a permanent fixture in the tax code, with new 10-year designations beginning in 2026 and every decade thereafter.
Governors can nominate new zones, pending Treasury approval.
This opens new geographies for long-term, tax-advantaged development.
Enhancements to Section 8 Housing Vouchers
The OBBBA expands the reach of the Section 8 program:
Easier access and simplified applications for residents.
New landlord incentives to accept vouchers and reduce discrimination barriers.
Though details are still evolving, this could significantly broaden the rental pool for voucher holders—especially if paired with new LIHTC developments.
Public Housing Funding Cuts
While incentives for development increase, the OBBBA also cuts funding for some public housing and social programs.
A $42.7M revitalization grant in East Knoxville was canceled shortly after the bill passed.
Critics warn these cuts could exacerbate displacement and leave existing communities behind as new units get built. That said, this presents an opportunity for developers and public-private partnerships to lead with solutions that preserve community while expanding affordable supply.
As the One Big Beautiful Bill Act reshapes affordable housing, developers, investors, and policymakers must stay mindful: not all communities will benefit equally. The cuts to public housing programs are real—and the path forward demands both strategic thinking and a people-first approach.
Impact Investing
Galvanize Climate Solutions Targets $2B Investment to Transform U.S. Commercial Real Estate
Billionaire Tom Steyer's Galvanize Climate Solutions is set to invest nearly $2 billion over the next three years to retrofit U.S. commercial properties into energy-efficient, net-zero buildings. This initiative aims to establish a new asset class of "net-clean" buildings, addressing the significant carbon footprint of the commercial real estate sector, which accounts for approximately 20% of U.S. emissions.
The firm has already acquired two properties: an 84,000-square-foot industrial facility in Maryland and a 246,000-square-foot site in New Jersey. Planned upgrades include installing insulated roofing and solar panels to achieve net-zero emissions within three years of ownership. Two additional acquisitions are currently under due diligence.
Galvanize's strategy aligns with emerging regulations in California and the European Union, which will soon require companies to disclose supply-chain emissions. By offering net-zero buildings, Galvanize provides tenants with a means to reduce their environmental impact and comply with these forthcoming mandates.
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