Transit Oriented Development Act of 2026

This Act may be cited as the Transit Oriented Development Act of 2026.
Section 42(d)(5) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:
In the case of any building located in a transit-oriented development area which is designated for purposes of this subparagraph—
in the case of a new building, the eligible basis of such building shall be 150 percent of such basis determined without regard to this subparagraph, and
in the case of an existing building, the rehabilitation expenditures taken into account under subsection (e) shall be 150 percent of such expenditures determined without regard to this subparagraph.
In the case of a transit-oriented development area in Hawaii, Alaska, or any territory of the United States, subclauses (I) and (II) of clause (i) shall each be applied by substituting 155 percent for 150 percent.
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.
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.
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.
The amendment made by this section shall apply to buildings placed in service after the date of the enactment of this Act.
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 to reflect such cost-of-living differences.