Senate version of GOP tax bill makes key changes to housing, federal lands sections

Following its passage in the House of Representatives, the One Big Beautiful Bill Act — President Donald Trump’s signature domestic policy bill that includes tax reform provisions with major implications for the federal budget deficit — is going through a series of pronounced changes during the reconciliation process in the Senate.

When a bill is passed by one chamber of Congress, it then goes to the other chamber for potential amendments. This process is called “reconciliation,” and the amended version then goes back to the House. Both chambers must agree on a final version before the bill goes to the president’s desk for a signature, which codifies it into law.

The Senate version of the Big Beautiful Bill contains provisions relevant to housing, as well as a burgeoning plan among Republican lawmakers to facilitate the sale of wide swaths of federal land for possible use in the development of new housing.

Housing and tax provisions

One housing provision that has garnered attention from people in and around the housing industry is the inclusion of a permanent 12% increase to the housing tax credit. The Affordable Housing Tax Credit Coalition (AHTCC) said this could “double the projected impact over the next decade to well over 1 million affordable homes.”

The permanent 12% allocation increase would go into effect starting next year. The Senate version also includes a reduction in the bond test threshold, with the current 50% test being lowered to 25% “permanently for developments in which the bonds are issued after December 31, 2025,” according to AHTCC.

“According to Novogradac, a permanent 25% test alone will finance 1.14 million affordable homes over the next decade than otherwise possible,” the organization stated.

But so-called “boosts” to both rural and Native American housing that were included in the House version of the bill were excised from the Senate version.

The bill also strengthens the Low Income Housing Tax Credit (LIHTC) program, according to Enterprise Community Partners. Shaun Donovan, its president and CEO, is taking a positive view of the housing provisions in the Senate bill.

“The Senate has just taken a monumental step toward increasing the number of affordable homes for communities nationwide, responding to the national demand to lower costs for families in every corner of this country,” Donovan said in a statement.

“Expanding and strengthening the Low-Income Housing Tax Credit will create over one million additional affordable homes at a time when they are so desperately needed, keeping costs down for hardworking families.”

Donovan also stated that the Senate version makes the New Market Tax Credit permanent. He said that will “not only allow for development in under-served communities — it also gives businesses certainty that the federal government stands behind local investments that drive growth.”

Donovan calls this a “commonsense, bipartisan solution” that can create local jobs while boosting urban, rural and tribal communities.

“We hope that this language remains in the final package and urge Congress to uphold these provisions as a critical investment in affordable housing, economic mobility, and community development,” he said.

Federal land use

While federal land use provisions in the bill have proven controversial, these have reportedly been narrowed to be used only for housing, according to reporting by Politico.

While the outlet said that the version of the bill it obtained could change, it also stated as of Tuesday morning that “lands owned by the Bureau of Land Management and Forest Service would now be used only for ‘the development of housing or to address associated infrastructure to support local housing needs.’”

But the potential sale of federal lands is irking some states with large federal land holdings, even if their state is not included in the language of the bill.

In Montana, for instance, a hunter named Randy Newberg — who maintains a public following of more than 500,000 on Facebook — railed against the proposal in a video he posted to his social media channels.

“If a deal’s been cut where it has the votes to get out of the committee and the Senate and attached to the budget, this is going to be really, really bad,” Newberg said in the video, according to a report by the Missoula Current.

“If this is true, which I have every reason to believe it is, it’s going to require a lot of pressure from a lot of people applied on everybody. What a joke.”

Sen. Mike Lee (R-Utah), the chairman of the Senate’s energy and natural resources committee, and Natural Resources Committee, posted a video last week to announce the plan. He contended that politicians in Washington, D.C., were stalling progress with these lands, and that the measure would allow for the development of more housing and businesses.

“We’re opening underused federal land to expand housing, support local development and get Washington, D.C., out of the way of communities that are just trying to grow,” he said in the video. “Washington has proven, time and again, it can’t manage this land. This bill puts it in better hands.”

Lee added that it “does not touch national parks, national monuments or wilderness,” but rebukes from the other side of the aisle have arrived swiftly.

Sen. Catherine Cortez Masto, a Nevada Democrat, blasted Lee for introducing a bill that would “use public land sales to pay for Senate Republicans’ billionaire tax cut bill.”

“Sen. Lee’s bill would instead send the revenue from future lands sales in Nevada to the general Treasury,” her office later added.