Senator Warren Introduces Affordable Housing Bill

Senator Elizabeth Warren (D-MA) recently introduced an affordable housing bill called the “American Housing and Economic Mobility Act.” It would authorize $500 billion for affordable housing programs over the next 10 years. The legislation increases funding for a number of affordable housing programs, including the Housing Trust Fund and Capital Magnet Fund.

The bill would also establish a middle-class housing emergency fund, through which HUD would award $4 billion in grants to state housing agencies on a competitive basis to support the construction of rental units affordable to middle-income individuals and families (those earning less than 120 percent of area median income). To be eligible to receive such grants, state housing agencies would have to demonstrate that there is a shortage of affordable housing available in their states and that housing costs in their states have increased more than income in the last three years.

Other provisions in the bill would:

• Increase federal funding to build or rehabilitate 3.2 million new housing units for lower-income and middle-class families and bring down rents by 10 percent in urban, suburban, and rural areas;
• Put $10 billion into a new competitive grant program that communities can use to build infrastructure, parks, roads, or schools—as long as local governments reform land use rules that make construction of new affordable housing needlessly more expensive;
• Provide down payment grants to first-time homebuyers living in lower-income, formerly redlined, or officially segregated areas to allow those families to start building home equity and close the racial wealth gap;
• Invest $2 billion to support borrowers whose wealth was destroyed in the 2008 financial crisis and who still have negative equity on their mortgages;
• Expand the Fair Housing Act to prohibit housing discrimination on the basis of sexual orientation, gender identity, marital status, and source of income, including government assistance;
• Strengthen the Community Reinvestment Act to cover more financial institutions, promote investment in activities that help poor and middle-class communities, and strengthen sanctions against institutions that fail to follow the rules; and
• Make it easier to use housing vouchers in neighborhoods with good schools and good jobs and allow tribal housing authorities to administer their own vouchers programs.

To offset the costs of these affordable housing investments, the legislation would roll back exemptions to the federal estate tax to their 2009 levels. The bill is likely to be referred to the Senate Banking Committee, but it’s unlikely that the committee or the Senate will act on it this year.