Pres. Joe Biden is proposing a massive investment in affordable housing through his infrastructure plan.
Biden's Massive Investment in Affordable Housing
As the coronavirus pandemic drives house prices to new highs, President Biden Joe Biden is promising a huge expansion in affordable housing through his development initiative, according to a recently published article in The Hiill.
Housing is not a big part of Biden's $2.5 trillion American Jobs Plan, which he announced last week as the next step of his economic recovery plan. The bill, on the other hand, will expend four times the entire 2020 budget of the Department of Housing and Urban Development on a variety of projects aimed at combating a housing crisis compounded by the pandemic.
In a recently publshed article in Reuters, with $213 billion in tax breaks, federal spending, and grants to promote the construction of new buildings and the renovation of old ones to support lower-income families, Biden hopes to create 2 million affordable houses and apartments.
The housing proposal is currently lacking in clarity, though it is possible that that will improve as Biden works to get his building bill passed through Congress. Despite this, advocates for sustainable housing, homebuilders, and housing economists believe Biden is on pace to making a significant dent in a critical shortage.
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Economists Share Their View of the Proposal
Ralph McLaughlin, chief economist for real estate and mortgage brokerage Haus, said "To be frank, it's something the housing market has needed for decades. And in the long run, it should help chip away at the housing supply problem in the U.S."
In the more than ten years since the Great Recession, home selling rates and rents have slowly increased, consuming a growing percentage of household budgets and excluding younger and less fortunate Americans from homeownership, according to The New York Times.
Jerry Howard, CEO of National Association of Home Builders, said "This affordability crisis is driven as much by supply as anything right now. If people can afford to buy their first home, it means somebody is moving up into another house, which grows the economy."
Despite a dramatic decline in home prices in February due to bad weather, the housing market is projected to pick up steam as the pandemic in the United States comes to an end. Biden's proposal, according to affordable housing proponents, could go a long way toward expanding opportunity for those at the lower end of the income scale.
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Some Information About Biden's Proposal
The National Housing Trust Fund, which provides states with funds to construct and restore affordable housing, is included in Biden's plan. While the funding will go a long way, Saadian pointed out that it just funds around half of the fund's $70 billion backlog of programs in need of assistance.
Such affordable housing programs include a $20 billion tax credit to promote the development and rehabilitation of 500,000 affordable homes in underserved neighborhoods, as well as a grant initiative to reward states and localities that eliminate zoning restrictions that prohibit the construction of affordable housing.
