President Trump’s recently signed “One Big Beautiful Bill” includes policies that are supposed  to promote investment in community development. The bill makes permanent key programs like the Low-Income Housing Tax Credit (LIHTC) and Opportunity Zones (OZ). But a closer look reveals that these changes primarily lock in tax breaks for investors while offering little real relief for the millions of households struggling with rising rents and housing insecurity.

Housing costs in the US have been climbing for years. According to the 2023 American Community Survey (ACS), nearly 21 million of the 42.5 million renter households, or about half, spend more than 30 percent of their income just to keep a roof over their heads. The Joint Center for Housing Studies (JCHS) finds that the share of rent-burdened households has risen across the board: 83.4 percent of renters making under $30,000 are now cost-burdened, up from 78.2 percent in 2001. Among families earning $30,000-$49,999, the figure has climbed from 55.3 percent to 70.3 percent. And even for families with incomes between $45,000-$74,999, rent burdens have nearly doubled, from 22.8 percent to 45.5 percent. 

These numbers make clear that America has a rent crisis, yet programs like LIHTC and OZ don’t tackle the root problem. In practice, these policies have high risks of exacerbating the very affordability crisis they claim to solve.

The Low-Income Housing Tax Credit (LIHTC) is currently the federal government’s primary tool for incentivizing affordable rental housing construction. LIHTC was created by the 1986 Tax Reform Act and gives state and local agencies approximately $10.5 billion to issue tax credits for acquisition, rehabilitation, and new construction of rental housing for low-income households. In other words, developers receive tax credits in exchange for reserving a portion of their units for lower-income tenants at below-market rents. 

However, LIHTC has serious limits. The affordability requirement only lasts either 15 or 30 years at most, after which landlords can raise rent to market levels, effectively shrinking the already scarce supply of affordable homes. Even before those restrictions expire, many of the units built under LIHTC are still too expensive for low-income families, who often need additional subsidies to actually afford the units. The program may help build housing, but it does not guarantee long-term affordability.

Trump’s new bill makes permanent a 12 percent boost in the annual pool of credits available to states. While this ensures states can consistently award more credits, it sidesteps the deeper issue: LIHTC is structured more as a tax break for investors than as a solution to the rental affordability crisis. Without strong tenant protections or deeper affordability requirements, the program risks reinforcing existing inequities rather than easing them.

The bill also cements Opportunity Zones (OZs). Originally created in 2017, OZs give huge tax breaks to investors who put their capital gains into designated “distressed” census tracts. Supporters claim that OZs bring fresh investment to struggling neighborhoods. However, instead of boosting opportunities for longtime residents, OZ projects often fuel displacement.  Evaluations of the program have shown “little or no evidence of positive effects of the OZ program on the employment, earnings, or poverty of zone residents.” Renters who make up the majority of residents in many OZ tracts are particularly vulnerable to being pushed out as rents rise. Unlike homeowners, renters see no financial upside when property values climb. Instead, they face an influx of luxury apartments, trendy eateries, and commercial projects that attract wealthier newcomers while pricing out existing communities.

Worse, many OZ-funded projects would have likely been built anyway. In those cases the program functions less as an economic spark for new development and more as a tax shelter for wealthy investors. Meanwhile, the foregone tax revenue drains federal resources that could otherwise support affordable housing or community redevelopment programs. By making Opportunity Zones permanent, the bill ensures that this pattern of investor-driven redevelopment will continue indefinitely. Without strong safeguards against displacement, this policy risks accelerating housing cost pressures and pushing out the very residents it is supposed to help. 

Put together, the pattern is hard to miss: the bill guarantees permanent benefits for capital investment, but not for tenants. LIHTC allocations are secured indefinitely, but affordability restrictions on housing units remain temporary. Opportunity Zones will continue to drive speculative development, but without mechanisms to protect current residents from displacement. Far from solving the housing crisis, this bill risks making it worse. The “One Big Beautiful Bill” cements a system where the security of investors is prioritized over the stability of tenants. Without stronger affordability rules and real protections against displacement, these policies could accelerate gentrification, shrink the stock of affordable housing, and deepen the struggles of low-income families fighting to remain in their homes.