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A Surprisingly Radical Housing Bill

Practically all the solutions to diminishing the high cost of housing,
from nudges to public options, are present in the housing piece of the
reconciliation bill.

 

HUD Secretary Marcia Fudge speaks after a tour of The Spire, an
affordable apartment community, August 13, 2021, in Alexandria,
Virginia. (Tom Williams/CQ Roll Call via AP Images)

 

By Alexander Sammon

The Build Back Better Act, Democrats' reconciliation bill featuring
most of President Biden's legislative priorities, is hard to sum up
succinctly. It's a climate bill, featuring a historic and sorely
needed investment in the green transition; it's a family care
bill, featuring paid family leave,
universal pre-K, and a home health care program; it's a health care
bill, with lowered prescription drug prices, Obamacare exchange
subsidies, a solution for Medicaid recipients in non-expansion states,
and dental care under Medicare. All of this still subject to negotiation
by House Democrats and the Senate, of course, which will cause everyone
watching to pull their hair out.

One of the few things the bill has not gotten much attention for is its
housing program. But that's not because the housing proposals are
lacking. The bill features a substantial investment in a number of
housing-related priorities that run the gamut from technocratic nudges
favored by neoliberals to significant resources directed toward
activist-favored solutions, including money for new public-housing
developments and community land trusts.

Running through the housing provisions introduced for markup

by the House Financial Services Committee, which wrapped up this week,
shows an interesting all-of-the-above approach to one of the most vexing
problems in the American economy, the soaring cost of housing. The bill
features $327 billion in new spending on housing, with the bulk of that
money going to public housing and housing vouchers, as well as some
low-income development. All told, a best-case scenario could see the
bill cutting homelessness in half within five years (though it features
that new, favored Democratic construction, in that some of it expires in
2026 and will need to be made permanent by a future Congress).

Starting with the smaller stuff, the bill features money for reforming
zoning codes, written to excite YIMBYs everywhere. It allocates $4.5
billion in grants, basically a bribe, to municipalities that change
their land-use laws to encourage and streamline the building of duplexes
and triplexes on single-family lots. This validates the theory that
development, density, and supply are at least a part of the solution.

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That dollar value pales in comparison to the money allocated for public
housing. This $80 billion pot represents such a substantial investment
that it could nearly, though not entirely, make up the funding deficit
that has plagued the country's major public-housing authorities for
years. That $80 billion is allocated in an interesting and unusual way,
with $66 billion of it under the direct discretion of Housing and Urban
Development Secretary Marcia Fudge. As Paul Williams, a fellow at the
Jain Family Institute, writes
,
the standard formula for allocating public funding money has sharply
underserved public-housing authorities in major cities like New York,
Chicago, and Philadelphia. Secretary Fudge will now have the opportunity
to remedy the most acute shortfalls those cities are experiencing.

The structure of that system proves the importance of Secretary
Fudge's appointment for progressives. While Fudge herself wanted to
head up Agriculture, not HUD, the appointment of a former Congressional
Progressive Caucus member to a Cabinet position in the Biden
administration now has a chance to pay huge dividends for housing
advocates nationwide, who have an ally empowered with significant
funding. For the New York City Housing Authority (NYCHA), for example,
which sports a $40 billion shortfall in its funding, Secretary Fudge
could nearly close the gap in one fell swoop.

Elsewhere, HUD's two main rental assistance programs are getting $90
billion, with $75 billion for Section 8 housing vouchers over just five
years, a substantial infusion of cash as well. Broken out annually, that
would make for a roughly 50 percent increase in its annual budget.
Currently, Section 8 has only enough funding to help 1 in 5 families
with their housing needs. This proposal would step up aid to extremely
low-income households and those at risk of homelessness or domestic
violence. Like the public-housing program, it's not enough to fully
fund all of the expressed need, but it's a big step in the right
direction.

There's also $72 billion for investments in affordable-housing
production through the HOME investment program, in another nod to the
need for more housing supply. That should boost projects for multifamily
housing all over the country.

And there are smaller amounts of money, too, for things like community
land trusts, a favored approach of activists, particularly in smaller
American cities where land costs aren't exorbitantly high. Community
land trusts allow communities to purchase the land on which housing
exists and maintain control over the housing stock, a shared-equity
structure that prevents outside landlords from driving up prices and
allows residents to benefit from rising property values. The bill
allocates money to help community groups purchase housing to be managed
in this way. It could be a big boost to groups in Santa Fe, New Mexico,
that are attempting to create the largest community land trust in the
country
.
While it may not be the most effective solution for expensive cities
where purchasing land is cost-prohibitive, it shows an interesting
willingness to entertain nontraditional solutions suggested by
activists.

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Plus, there are other, non-monetary commitments of note, as well. The
bill exempts the appropriated funds from counting under the Faircloth
Amendment, a 1998 provision that prohibits HUD from funding new
public-housing development if it increases the number of units a
public-housing authority owns. Most of the public-housing funds are
intended to go toward the backlog of repairs, and so little new public
housing is likely to be built. But getting rid of the Faircloth
prohibition has been a priority for Reps. Alexandria Ocasio-Cortez
(D-NY), Nydia Velázquez (D-NY), and Ilhan Omar (D-MN), and this
stipulation signals a new attitude from Congress toward building new
public housing, which has been impossible for decades. For the first
time in a long time, public-housing authorities are being told they can
build and expand.

The question, of course, is whether all of these provisions survive the
deliberation process. Residents of public and subsidized housing are not
the most powerful constituencies in Washington, which is currently
teeming with lobbyists, as corporate interests try to hollow out the
reconciliation bill. Despite the White House's willingness to engage
with housing activists and groups like the National Low Income Housing
Coalition, it will be a battle to keep the interests of low-income
residents and the precariously housed in place. If the size of the bill
begins to shrink, the lack of publicity surrounding the housing
commitments and the amount of money allocated to people who don't tend
to vote in outsized numbers will make it an easy target for cut-happy
Democrats like Joe Manchin.

Manchin's Democratic colleague Mark Warner has already signaled his
issues

with the housing package himself, not because of the low-income housing
provisions, but because there's not enough money for down payment
assistance, in his estimation. Obviously, down payment assistance is a
benefit for a much different class stratum, one more likely to make for
regular voters (and donors), though there's little reason to believe
it's a total solution to the sweeping affordability crisis that is the
United States' housing system.

Still, taking on housing costs is one of the most effective ways to
combat inflation, which centrist Democrats claim to care so greatly
about. Housing costs remain one of the most inflated aspects of American
life, eating up a unique percentage of paychecks. Bringing down housing
costs would be the most meaningful method of limiting living expenses
for Americans, combating the "inflation tax" that Sen. Manchin opined

about so nonsensically in

**The Wall Street Journal**. If he was serious about that worry, he
would be the housing proposals' biggest advocate.

To read more about infrastructure and the Build Back Better Act, check
out our series Building Back America
.

 

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