“The biggest proposal we’ve seen in a long time.” Biden’s American Jobs Plan would make a significant investment in affordable housing

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When President Joe Biden unveiled his infrastructure package, dubbed the American Jobs Plan, he didn’t just raise the curtain on a proposal to improve the nation’s highways and expand broadband access. The package, if approved, would also represent one of the largest housing investments the country has seen in many years. As part of the $ 2.3 trillion infrastructure plan, the White House has earmarked $ 213 billion to build, preserve and modernize more than 2 million homes across the country. In detailing the plan, the Biden administration noted that the nation faces “a severe shortage of affordable housing options.”

Opponents of the plan, including Senate Republican Minority Leader Mitch McConnell, have called the broader infrastructure plan “the ultimate liberal wish list.” But housing experts praised the focus on housing. “Housing is infrastructure,” Jenny Schuetz, senior researcher and urban economist at the Brookings Institution, a center-left think tank, said on Twitter TWTR, + 0.31%. “I love it.” The National Association of Realtors issued a statement in favor of the proposal, and the main trade group said it will work with Congress and the Biden administration to ensure the package is financed “responsibly.” The National Association of Home Builders welcomed the focus on affordable housing, while expressing concern about the labor and tax provisions included in the plan. and modernization of more than one million affordable housing units, through targeted tax credits, grants, and rental assistance. Construct or rehabilitate more than 500,000 homes for low- and middle-income home buyers, as set forth in the bipartisan Neighborhood Housing Investment Act. Create a competitive grant program that awards funds to localities that eliminate “exclusionary zoning and harmful land use policies.” Invest $ 40 billion to address capital needs for existing public housing. Upgrade homes to be climate-controlled and energy efficient through a block grant program. “They propose to do exactly what we should be doing, which is improve the economics of affordable housing construction and renovation,” said Jim Parrott, a nonresident fellow at the Urban Institute, a center-left think tank based in Washington, DC, and owner of Parrott Ryan Advisors, a consulting firm that advises financial institutions on home finance issues. “This means using tax credits and grants to make this segment of the market profitable and using federal funds as a carrot to get local governments to remove barriers to building affordable housing in the areas that people most want to live in,” he added. Cowen analyst Jaret Seiberg noted that support for the Neighborhood Housing Investment Act in particular came as a surprise. The legislation provides for the creation of a program inspired by the Low Income Housing Tax Credit. Under the bill, private developers could get tax credits to rehabilitate or replace homes in low-income neighborhoods, particularly in inner cities and rural areas. Then those houses would sell for no more than four times the local median household income. “The idea is to turn empty houses into places where people want to live,” Seiberg wrote, noting that Cowen had previously been less optimistic about the plan “because progressives worry about gentrification, which could be argued that this may encourage “. Plan could fall short The $ 213 billion allocated for housing in Biden’s plan is “certainly the largest proposal we’ve seen in a long time,” said Susan Popkin, director of the Housing Opportunities and Services Together Initiative (HOST ) from the Urban Institute and a colleague at the Metropolitan Center for Housing and Community Policies. But Popkin echoed concerns raised by others that elements of Biden’s plan may not meet all the needs of the American people. Some Democratic lawmakers, including Representatives Alexandria Ocasio-Cortez and Nydia Velázquez, both from New York, disagreed with the $ 40 billion set aside for public housing, which they say would not even cover all the needs of the Housing Authority of the City of New York. , the Big Apple‘s public housing operator. Housing experts estimate there is about $ 70 billion in capital needs in the nation’s public housing projects, Popkin noted, adding that the figure is likely an underestimate. “It is not enough to preserve what is really a central resource in the United States,” Popkin said. Some progressive legislators and organizers have called for the repeal of the Faircloth Amendment, which limits the construction of new public housing units, but the Biden plan did not include any changes to this policy. “Right now, only one in four people applying for housing assistance receives it,” Popkin said. “The population of people who need it is growing and we are not prepared to meet that need,” he said. “What we have available is in poor condition and in need of a major renovation and new development.”

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“‘The problem is that local communities enforce these zoning limits because the voters in those neighborhoods demand them.’ ”- Cowen analyst Jaret Seiberg

Meanwhile, other observers were skeptical of efforts to repeal local zoning regulations. In previous Congressional hearings, both Democratic and Republican lawmakers have voiced their willingness to reconsider local rules that prohibit or delay the construction of new homes, particularly multi-family buildings. But the proposal put forward by the White House only suggests vague incentives to encourage local lawmakers to rewrite their rules. “The problem is that local communities enforce these zoning limits because the voters in those neighborhoods demand them,” Seiberg wrote, adding that federal lawmakers would have to be more aggressive to gain ground there. “The federal government forced states to raise the minimum drinking age to 21 by threatening to withhold funding for the highways,” he said. “It would take something equally massive to make a difference.”