Can’t Afford A Home? Here’s How Biden’s Affordable Housing Proposal Could Help

Congress took a big step today toward repairing deeply rooted affordable housing issues as the House passed the Build Back Better Act. Now, the bill goes to the Senate, where it’s expected to meet unified resistance from Republicans.

President Joe Biden’s sweeping $1.75 trillion social spending bill aims to lessen housing burdens through widespread investment, in everything from down payment assistance for first-generation homebuyers to adding more public housing stock.

The National Fair Housing Alliance praised the bill’s passage, saying it could change the affordable housing landscape. “We applaud the House of Representatives today for passing the Build Back Better Act, the largest investment in basic housing and fair housing enforcement infrastructure needs in U.S. history,” the group said in a statement.

But some opponents of Biden’s plan argue that, in the long run, the massive spending bill will end up hurting the same families it’s meant to help via higher taxes.

“All this money that’s being dangled in front of families will have to be repaid at some point, and taxing corporations and the ‘rich’ won’t come close to paying the bills,” says Rachel Greszler research fellow in economics, budget and entitlements for The Heritage Foundation, a right-leaning think tank.

A good portion of Build Back Better is set aside for housing. Here are key areas where homebuyers would benefit.

Housing Voucher Program Would Get Boost

The proposal would add $24 billion for rental assistance over five years in addition to the $29 billion approved for 2022.

This is significant because some 5 million people depend on vouchers to afford housing—including low-income seniors, working families, veterans and people with disabilities. Eligible recipients can use vouchers to offset the costs of any private housing they choose, as long as the landlord accepts housing vouchers.

The main concern is that the program comes up short as just 1 in 4 people eligible for vouchers gets them due to vast underfunding. And those who are eligible have to wait an average of 2.5 years to receive vouchers.

Along with adding to the Housing Choice Vouchers program, $1 billion also would go toward the Project Based Rental Assistance (PBRA) program, which is different from the voucher program because it’s tied to a property rather than the individual. This is a critical program in creating permanent housing for people who are experiencing homelessness.

Improve and Preserve Some 1 Million Homes

Public housing has been operating on a shoestring budget, which has led to a shortage of units, with the deficit in homes estimated to be about 200,000.  The problem is multifold, from decaying public housing stock to lagging construction of new units. Biden’s plan would tackle the spectrum of problems, starting with $1.6 billion for existing public housing units that require repairs and renovations to make them safer for tenants.

The bill also includes $10 billion for the HOME Investment Partnerships Program, which builds, purchases and rehabs affordable homes for low-income families. For the lowest-income households, $15 billion would go to expanding available rental housing.

Block grants would also get a big cash infusion to spur everything from new housing construction and community revitalization to the renovation of existing housing.

The Community Development Block Grant Funding for Affordable Housing and Infrastructure would receive $3.05 billion for the Community Development Block Grant program (CDBG). The CDBG assists with community and housing needs—from housing rehab to building community centers. And another $3 billion would go toward competitive grants for nonprofits to help revitalize rural, suburban, and urban neighborhoods.

A new fund would be created to boost public housing supply, the Housing Investment Fund, which would direct $750 million toward competitive grants for non-profit developers and Community Development Financial Institutions (CDFI).

Rural rental housing and farm labor housing programs would also be awarded $2 billion for a host of housing issues, including new construction, upgrades in energy and water efficiency, removal of health and safety hazards and additional rental assistance to eligible households.

Biden’s plan also takes on strict exclusionary zoning laws that make expanding affordable housing difficult or even impossible.

Tight zoning laws like minimum lot sizes and parking requirements pump up land values and make any new construction more expensive; these higher costs are passed on to buyers and renters. Some $1.75 billion would go toward grants to help loosen these laws in local governments, local entities and Native American tribal communities.

Help For Homebuyers Facing Affordable Housing Crunch

As homeownership becomes further out of reach for many Americans, the legislation would direct billions of dollars to homeownership programs. The First-Generation Downpayment Assistance program would get $10 billion to help first-time, first-generation homebuyers secure a home.

Eligible recipients would get $20,000 or 10% of the purchase price of a qualified home in financial assistance (whichever is greater); these funds could be used for the down payment, closing costs and points to buy down the interest rate. Some $500 million of this allotment would be directed to housing counseling agencies.

The Home Loan Program would get $5 billion to subsidize 20-year mortgages for first-generation homebuyers.

A $100 million would go to the HUD-Insured Small Dollar Mortgage Demonstration Program, a pilot program that helps eligible homebuyers purchase homes under $100,000.

The Investments in Rural Homeownership program, which helps homeowners in rural areas repair, upgrade and keep up their homes—including manufactured housing, would get $100 million in grant funding through the Department of Agriculture.

Create Environmentally Friendly and Healthier Housing

The bill also tackles the carbon footprint we leave behind with outdated housing units, which contribute to greenhouse gas emissions. Energy and water efficiency would get a helping hand with a $2 billion grant program created for climate resilience upgrades to federally assisted housing units.

And, as climate change poses more risks, the National Flood Insurance Program is more important than ever. Build Back Better would forgive $20.5 billion in National Flood Insurance Program (NFIP) debt. It would also put $600 million toward flood mapping, which is currently operating on an “out-of-date” plan, according to the U.S. Government Accountability Office (GAO). Another $600 million would help households who earn up to 120% of area median income secure insurance.

Along with goals for a healthier planet, the bill would also put $5 billion toward removing lead paint and “other health hazards” in the existing housing stock.

Funds For Fair and Equitable Housing

The Fair Housing Initiatives Program, which supports local enforcement of fair housing laws, would receive $700 million. And another $100 million would go to the Fair Housing Assistance Program, which promotes intergovernmental enforcement of fair housing laws.

Funds would also go to housing for people with disabilities ($500 million) and the elderly ($500 million).

Native American, Alaska Native, and Native Hawaiian communities would receive $1 billion for essential housing and community development needs.


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