Transit Oriented Development Act of 2022

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) (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 ½ (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) (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 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 26 U.S.C. 42

Summary: Transit Oriented Development Act of 2022 This bill increases the low-income housing tax credit for buildings in transit-oriented development areas. The bill defines a transit-oriented development area as a designated area located within 1/2 mile from a rail, bus, harbor, or waterway station and zoned for high density. It also provides for an increase in the credit for buildings in high cost areas in non-contiguous states (i.e., Alaska and Hawaii) and U.S. possessions. The bill directs the Department of Housing and Urban Development to study cost-of-living differences throughout the United States based on geographic location and proximity and accessibility to transit.