A bipartisan group of senators has introduced the Housing Affordability and Community Development Act, which would offer federal tax incentives to developers who build mid-density housing in areas zoned for single-family residences. The bill targets the so-called missing middle of the housing market, including duplexes, triplexes, and small apartment buildings.
The legislation would provide a 30 percent tax credit for construction costs on qualifying projects and condition the incentives on affordability requirements that keep at least 20 percent of units available to households earning below the area median income. States that reform local zoning laws to accommodate mid-density housing would receive additional federal funding.
Housing policy experts say the bill addresses a key structural barrier to affordability, as restrictive zoning in many metropolitan areas has limited supply and driven up prices. Opposition is expected from some local government associations and homeowner groups who argue that zoning decisions should remain a local prerogative.
