# Summary of S. 3436 — Workforce Housing Tax Credit Act
This bill creates a new federal tax credit for middle-income housing, modeled after the existing low-income housing tax credit. The credit provides tax incentives to developers and investors who build or rehabilitate rental housing for households earning up to 100 percent of area median income, with at least 20 percent of units reserved for households at or below that income level and rented at affordable rates.
The credit applies to new buildings and existing buildings undergoing substantial rehabilitation. Property owners can claim the credit over 15 years, with the credit amount based on a percentage of the building's eligible basis. The percentage varies depending on whether the building receives federal subsidies, with non-subsidized new buildings eligible for higher credit rates. States receive annual allocations to distribute these credits, with funding tied to state population and a minimum annual amount that increases annually for inflation starting in 2024.
The bill includes provisions prioritizing projects in high-cost areas, rural locations, properties near transit, and projects with long-term affordability commitments. Housing credit agencies must follow qualified allocation plans and conduct market studies before approving credits. The legislation also allows states to transfer some of their middle-income housing credit ceiling to the existing low-income housing credit program for rural projects.
The bill becomes effective for buildings placed in service after December 31, 2023, and does not specify dedicated federal appropriations, as the credits operate through foregone tax revenue rather than direct spending.
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