The Reservoir District Tax Exemption Amendment Act of 2026 aims to amend Chapter 46 of Title 47 of the District of Columbia Official Code to ensure that the property in the Reservoir District is designated as affordable housing, specifically applying Fair Market Rents as calculated by the U.S. Department of Housing and Urban Development (HUD). The bill addresses a discrepancy between the tax abatement financial analysis (TAFA) structured using the 80 Percent Income Limit Category of HUD's Multifamily Tax Subsidy Project Income Limits and the Inclusionary Zoning (IZ) rates published by the District of Columbia Department of Housing and Community Development. This inconsistency could jeopardize the project's economic feasibility and delay the delivery of affordable housing and community benefits, including a grocery store.

To rectify this issue, the bill amends Section 47-4683(b)(2) to specify that one-third of the operating rental housing units in the property will be set aside as affordable, in accordance with the 80 Percent Income Limit Category of the Multifamily Tax Subsidy Project Income Limits for the Washington-Arlington-Alexandria, DC-VA-MD HUD Metro Fair Market Rent Area. This tailored correction is intended to facilitate the project's operation under the appropriate income limits, thereby supporting the development of affordable housing and associated community benefits.