How to rebuild better would impact housing – Forbes Advisor

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Congress took a big step today towards fixing deeply rooted affordable housing issues as the House passed the Build Back Better Act. Now the bill is going to the Senate, where it is expected to meet unified resistance from Republicans.

President Joe Biden’s $ 1.75 trillion social spending bill aims to reduce the housing burden through widespread investments, in everything from down payment assistance for first generation homebuyers to the increase in the public housing stock.

The National Fair Housing Alliance has welcomed the passage of the bill, saying it could change the landscape for affordable housing. “Today we applaud the House of Representatives for passing the Build Back Better Act, the largest investment in basic housing infrastructure and fair housing law enforcement needs in history. from the United States, “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 very families it is supposed to help through higher taxes.

“All this money that is hanging in front of families will have to be paid back at some point, and taxing businesses and the ‘rich’ will not come close to paying the bills,” said Rachel Greszler, economics, budget and rights researcher. for The Heritage Foundation, a right-wing think tank.

Much of Building Back Better is for housing. Here are the key areas where home buyers could benefit.

Housing voucher program would be boosted

The proposal would add $ 24 billion in rent assistance over five years on top of the $ 29 billion approved for 2022.

This is important because some 5 million people depend on vouchers for housing, including low-income seniors, working families, veterans and people with disabilities. Eligible beneficiaries can use vouchers to offset the costs of any private accommodation they choose, provided the owner accepts the housing vouchers.

The main concern is that the program fails because only 1 in 4 people eligible for the vouchers get them due to vast underfunding. And those who are eligible must wait an average of 2.5 years to receive vouchers.

In addition to the addition to the Housing Choice Vouchers program, $ 1 billion will also go to the Project Based Rental Assistance (PBRA) program, which is different from the voucher program because it is tied to a property rather than the individual. This is an essential program for the creation of permanent housing for homeless people.

Improve and preserve some 1 million houses

Public housing has been operating on a tight budget, resulting in a housing shortage, with the housing deficit estimated at around 200,000. The problem is manifold, from the decaying public housing stock to the late construction of new units. Biden’s plan would tackle the spectrum of problems, starting with $ 1.6 billion for existing social housing that requires repairs and renovations to make it safer for tenants.

The bill also includes $ 10 billion for the HOME investment partnership program, which builds, purchases and rehabilitates affordable housing for low-income families. For households with the lowest incomes, $ 15 billion would be spent on expanding available rental housing.

Block grants would also get a large injection of funds to spur everything from building new homes and community revitalization to renovating existing homes.

Community Development Block Grant funding for affordable housing and infrastructure would receive $ 3.05 billion for the Community Development Block Grants (CDBG) program. CDBG responds to community and housing needs, from housing rehabilitation to building community centers. And an additional $ 3 billion would be spent in competitive grants for nonprofits to help revitalize rural, suburban and urban neighborhoods.

A new fund would be created to boost the supply of public housing, the Housing Investment Fund, which would devote $ 750 million to competitive grants for nonprofit developers and community development finance institutions (CDFIs). .

Rural rental housing and farm labor housing programs would also be awarded $ 2 billion for a host of housing issues, including new construction, energy efficiency and water improvements. , elimination of health and safety risks and additional rent support for eligible households.

Biden’s plan also passes strict exclusionary zoning laws that make it difficult, if not impossible, to expand affordable housing.

Strict zoning laws such as minimum lot size and parking requirements increase the value of land and make any new construction more expensive; these higher costs are passed on to buyers and tenants. Some $ 1.75 billion would go towards grants to help loosen these laws in local governments, local entities and Native American tribal communities.

Helping Home Buyers Facing the Affordable Housing Crisis

As homeownership becomes more and more inaccessible for many Americans, the legislation would allocate billions of dollars to homeownership programs. The first generation down payment assistance program would get $ 10 billion to help first generation first generation home buyers get a home.

Eligible recipients would receive $ 20,000 or 10% of the purchase price of an eligible home in financial assistance (whichever is greater); these funds could be used for the down payment, closing costs and points to reduce the interest rate. Some $ 500 million of this allowance would go to housing counseling agencies.

The home loan program would get $ 5 billion to subsidize 20-year mortgages for first-generation homebuyers.

$ 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 Rural Homeownership Investments program, which helps homeowners in rural areas repair, upgrade and maintain their homes, including manufactured homes, would receive $ 100 million in grants from the Ministry of Agriculture.

Create environmentally friendly and healthier housing

The bill also addresses the carbon footprint we leave behind with dilapidated housing, which contributes to greenhouse gas emissions. Energy and water efficiency would get a boost through a $ 2 billion grant program created to improve the climate resilience of federally assisted housing units.

And, as climate change poses more risk, the national flood insurance program is more important than ever. Build Back Better would write off $ 20.5 billion in National Flood Insurance Program (NFIP) debt. It would also spend $ 600 million on flood mapping, which currently operates on an “outdated” plan, according to the United States Government Accountability Office (GAO). Another $ 600 million would help households earning up to 120% of the region’s median income get insurance.

In addition to the healthier planet goals, the bill would also allocate $ 5 billion to eliminate lead paint and “other health risks” from existing building stock.

Fair and equitable housing fund

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

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

Native American, Native Alaskan and Hawaiian communities will receive $ 1 billion for basic housing and community development needs.


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