H.R. 8401 – Transit Oriented Development Act of 2022

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Updated February 8, 2026 at 4:39 PM UTC

The Transit Oriented Development Act of 2022 changes the low‑income housing tax credit to give a larger credit for affordable housing built near transit and in hard‑to‑develop areas. It boosts the credit for new or rehabilitated projects located within half a mile of a rail, bus, harbor or waterway station and zoned for high density, and it adds a higher credit for projects in Hawaii, Alaska and U.S. possessions. The bill also orders HUD to study cost‑of‑living differences across the country and suggest how to adjust credit allocations accordingly.

Key Provisions

In transit‑oriented development areas, the eligible basis for new buildings and the rehabilitation expenditures for existing buildings are counted at 180% of their normal amount, increasing the tax credit.
A transit‑oriented development area is defined as an area within ½ mile of a transit station and zoned for high‑density, designated by HUD and state housing credit agencies, with the total designated area limited to 20% of a metro area’s population (similar limit for non‑metro areas).
For Hawaii, Alaska, and U.S. possessions, the credit multiplier is set at 170% (instead of the standard 130%) for qualifying projects.
HUD must conduct a study on geographic cost‑of‑living differences and submit a report with recommended allocation formulas to Congress within one year of the Act’s enactment.

Legislative Activity

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1 earlier action

HouseIntro Referral Latest Action

Referred to the House Committee on Ways and Means.

Ways and Means Committee

July 15, 2022

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HouseIntro Referral

Introduced in House

July 15, 2022

HouseIntro Referral

Referred to the House Committee on Ways and Means.

Ways and Means Committee

July 15, 2022

Bill Text

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Introduced in HouseIssued July 15, 2022

I

117th CONGRESS

2d Session

H. R. 8401

IN THE HOUSE OF REPRESENTATIVES

July 15, 2022

Mr. Kahele (for himself and Mr. Case) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to modify the low-income housing tax credit to incentivize affordable and transit-oriented development and development in certain difficult development areas, and for other purposes.

1.

Short title

This Act may be cited as the Transit Oriented Development Act of 2022.

2.

Low-income housing tax credit for transit-oriented development areas

(a)

In general

Section 42(d)(5) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

(C)

Increase in credit for buildings in transit-oriented development areas

(i)

In general

In the case of any building located in a transit-oriented development area which is designated for purposes of this subparagraph—

(I)

in the case of a new building, the eligible basis of such building shall be 180 percent of such basis determined without regard to this subparagraph, and

(II)

in the case of an existing building, the rehabilitation expenditures taken into account under subsection (e) shall be 180 percent of such expenditures determined without regard to this subparagraph.

(ii)

Transit-oriented development area

For purposes of this subparagraph, the term transit-oriented development area means an area designated by the Secretary of Housing and Urban Development and State housing credit agency as located in an area within ½ of a mile from a rail, bus, harbor, or waterway station and as zoned for high-density.

(iii)

Limit on areas designated

The portions of metropolitan statistical areas which may be designated for purposes of this subparagraph shall not exceed an aggregate area having 20 percent of the population of such metropolitan statistical areas. A comparable rule shall apply to nonmetropolitan statistical areas.

(iv)

Coordination with high cost areas

If the eligible basis of a new building, or the rehabilitation expenditures with respect to an existing building, are determined pursuant to subparagraph (B), such building shall not be treated as located in a transit-oriented development area for purposes of this subparagraph.

.

(b)

Effective date

The amendment made by this section shall apply to buildings placed in service after the date of the enactment of this Act.

3.

Low-income housing tax credit for difficult development areas in non-contiguous States and possessions

(a)

In general

Section 42(d)(5)(B) of the Internal Revenue Code of 1986 is amended by adding at the end the following new clause:

(vi)

Special rule for non-contiguous States and possessions

In the case of Hawaii, Alaska, and any possession of the United States, subclauses (I) and (II) of clause (i) shall each be applied by substituting 170 percent for 130 percent.

.

(b)

Effective date

The amendment made by this section shall apply to buildings placed in service after the date of the enactment of this Act.

4.

HUD study regarding adjustment of tax credit allocations to reflect geographic cost-of-living differences

The Secretary of Housing and Urban Development shall conduct a study to identify cost-of-living differences throughout the United States based on geographic location and proximity and accessibility to transit. Not later than the expiration of the 1-year period beginning on the date of the enactment of this Act, the Secretary shall submit a report to the Congress setting forth the results and conclusions of the study and recommending formulas for the adjustment of annual allocations to the States of low-income housing tax credits under section 42 of the Internal Revenue Code of 1986 (26 U.S.C. 42) to reflect such cost-of -living differences.