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Housing incentive tucked into tax cut bill
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This is Washington Edition, the newsletter about money, power and politics in the nation’s capital. Today, Emily Flitter, who reports on economic and social inequality, looks at what Trump’s tax and spending bill means for affordable housing. Sign up here and follow us at @bpolitics. Email our editors here.

Incentive to Build

President Donald Trump’s “One Big Beautiful Bill” is known mainly for what it cuts: taxes, Medicaid coverage and food assistance among other things. But tucked inside the almost-900-page legislative text are a few lines that represent the biggest increase in incentives to build affordable housing in a generation.

That has both real estate developers and housing advocates cheering.

The revamp of three tax-based community development programs is expected to boost construction of new apartment buildings and renovation of older ones. Housing analysts saying they could spark the building of as many as 1.2 million more affordable units over the next 10 years than they would have without the changes.

Construction at an affordable housing development in Pennsylvania. Photographer: Rachel Wisniewski/Bloomberg

It increases the size of tax credits awarded under the Low-Income Housing Tax Credit. It also decreases the share of money states and municipalities have to kick in for an affordable housing development. Those changes should make it easier for local governments and developers to do more deals at once.

Meanwhile, an expanded pool of investors will be able to use the now-permanent New Markets Tax Credit. Community development organizations can tap into tax credits in the program to fund loans not only for housing development but also for new businesses, manufacturing facilities and cultural spaces.

And it makes permanent Opportunity Zones, which gives investors tax breaks for putting money into projects in low-income areas. That program has drawn some criticism for failing to get private capital to the places where it’s most needed and accelerating gentrification that pushes poorer people out of their neighborhoods. The new legislation tweaks the rules for the program to address these concerns, imposing new transparency requirements and narrowing the parameters for which areas can qualify for the tax breaks.

But there’s a potential catch: The programs rely on private developers to do the right thing, so to speak, while trying to make money. Jeff Monge, a developer focused on social impact investing, put it this way:

“We don’t have a history of investors looking at doing good and well,” he said. “There’s a history of doing well.”— Emily Flitter

Don’t Miss

Trump’s threat to impose a 50% tariff on Brazil over its domestic political affairs is the most extreme case yet of his willingness to weaponize trade policy to make unrelated demands.

Nvidia CEO Jensen Huang is meeting with Trump at the White House, days before a planned trip to China by the head of the world’s most valuable chipmaker.

A key Trump official said Federal Reserve Chair Jerome Powell has “grossly mismanaged” the institution and demanded more information about the renovation of Fed headquarters in Washington. 

Fed Bank of San Francisco President Mary Daly said she still views two interest rate cuts as likely this year and sees a greater chance that the impact of tariffs on prices may be more muted than anticipated.

Former Vice President Mike Pence criticized Trump’s tariff agenda, saying it was a starkly different approach to trade from his first term that would harm American consumers and businesses.

Federal judges have continued to order sweeping halts to Trump’s policies in the immediate aftermath of a Supreme Court decision that limited their use of such powers.

A growing number of migrants in the US are heading north to seek asylum, even as Canada adopts increasingly restrictive immigration policies of its own.

Applications for unemployment benefits fell for a fourth week to the lowest in two months during a period that included the Independence Day holiday, though continuing claims rose.

Six Secret Service agents have been suspended as a result of an investigation into the July 2024 assassination attempt against then-candidate Trump at a campaign rally in Pennsylvania.

Key House lawmakers are pressing the Trump administration to accelerate a congressionally mandated review of Chinese-made drones ahead of a potential US ban later this year. 

Watch & Listen

Today on Bloomberg Television’s Balance of Power early edition at 1 p.m., hosts Joe Mathieu and Kailey Leinz interviewed Republican Representative Chuck Fleischmann about the outlook for a package of spending cuts requested by Trump and passing a budget before the end of the fiscal year.

On the program at 5 p.m., they talk with retired Air Force General Philip Breedlove about US aid for Ukraine and the outlook for a ceasefire.

On the Trumponomics podcast with host Stephanie Flanders, Bloomberg’s head of government and economics, is joined by Bloomberg News reporter Emily Birnbaum and Ethan Zindler of BloombergNEF to explore how Trump’s “One Big Beautiful Bill” could push up electricity bills and damage US competitiveness in AI. Listen on Apple Podcasts, Spotify or wherever you get your podcasts.

Chart of the Day

In the five years since the pandemic, there's been a shift in generational wealth in the US. Americans under 40 still hold the smallest share of wealth, but that portion got bigger between the first quarter of 2025 and the same period in 2020. And for the first time, their share of liabilities exceeded 40% of the total, up from 26.5% in 2020, as millions among that large cohort purchased homes and increased their credit debts. Those age 70 or older, largely retirees, experienced a big increase in their share of household wealth from assets like real estate, stocks and mutual fund shares. The growth was partially driven by the large cohort of aging baby boomers. Meanwhile, Americans age 40 to 70 saw their share of total household wealth shrink, even though those age 55-69 hold the greatest total amount. — Alex Tanzi

What’s Next

The consumer price index data for June will be released July 15.

The producer price index for June will be reported July 16.

Retail sales in June will be reported on July 17.

June’s import price index is set for release July 17.

Housing starts and building permits for June are out on July 18.

The University of Michigan’s preliminary reading of consumer sentiment in July will be released July 18.

Sales of existing homes during June will be reported July 23.

New home sales in June will be reported July 24.

Durable goods orders for June will be released July 25.

Seen Elsewhere

  • Some states say the Federal Emergency Management Agency is nearly two months behind in posting guidelines for grants that are supposed to reflect White House priorities, the New York Times reports.
  • Widespread, abrupt terminations at the Justice Department and FBI, often without explanation, have created an atmosphere of fear that is prompting some staff to quit, the Washington Post reports.
  • Officials are tracking a swarm of earthquakes at Mount Rainier in Washington state but say that the cluster of quakes is considered "background activity" and not a cause for concern, the Associated Press reports.

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