Biden’s Plan to Invest $640 Billion

9 min read

Democratic Campaign Housing Platform Takes Broad Approach

Far too many Americans lack access to affordable and quality housing. Nationwide, we have a shortage of available, affordable housing units for low-income individuals. Tens of millions of Americans spend more than 30 percent of their income on housing—leaving them with nowhere near enough money left over to meet other needs, from groceries to prescription drugs. 
And tens of millions of Americans live in homes that endanger their health and safety.

This is the motivating statement behind former Vice President Joe Biden’s housing policy plan, and he has made clear that it is a central and essential part of his presidential candidate platform. He says that satisfactory housing should be a right, not a privilege, and considers it not only an avenue to rebuilding the American middle class, but also a way for communities of color to build wealth through home ownership, something that was often denied them in the past through systemic housing discrimination. His plan is holistic of the entire spectrum of housing, from homelessness to home ownership, but for our purposes we’re going to focus on multifamily rental housing.

As part of a proposed ten-year, $640 billion investment, Biden’s plan aims to: end redlining and other discriminatory practices; provide financial assistance for purchase or rental of “safe, quality housing, including fully funding federal rental assistance;” increase the supply, lower the cost and improve the quality of housing; and pursue a comprehensive approach to ending homelessness.

Biden has embraced the concept often stated in these pages that stable housing is the key to vibrant and thriving neighborhoods, be they urban or rural, and affects every other social determinant of health, education and upward mobility. Without stable housing, virtually no other personal or family progress is possible. His program codifies its goals into six descriptors:

  • Affordable – taking up no more than 30 percent of income;
  • Stable – providing families with the consistency they they need to maintain jobs, perform well in school and develop social networks necessary for well-being;
  • Safe and Healthy – protecting families from environment and social risks, from polluted air to lead contamination to gun violence;
  • Accessible – meeting the needs of individuals with disabilities;
  • Energy Efficient and Resilient – reducing greenhouse gas emissions and withstanding the impacts of climate change; and
  • Reasonable Location – near good schools and within efficient distance to jobs.

Homeowner and Renter Bill of Rights
Social justice has always been part of Biden’s political identity and he strongly advocates for policies to end discriminatory practices. He proposes to accomplish this through a Homeowner and Renter Bill of Rights modeled on the California Homeowner Bill of Rights. On the rental side of the proposal, landlords would be prohibited from discriminating against tenants receiving federal housing subsidies.

As elaborated in last month’s Tax Credit Advisor, eviction is a complex subject with a wide variety of causes and effects. But under Biden’s plan, tenants facing eviction would be entitled to legal representation. He notes that families can be devastated by eviction, and that it often arises over relatively small shortfalls in rent. As president, he promises to work with Rep. James Clyburn (D-SC) and Sen. Michael Bennet (D-CO) to pass the Legal Assistance to Prevent Evictions Act of 2020 to provide such legal assistance. He also would encourage municipalities to create eviction diversions programs, including mediation, payment plans and financial literacy education programs.

Biden’s Bill of Rights would eliminate local and state housing regulations that perpetuate discrimination through exclusionary zoning. As president, he would push for legislation that would require any state receiving funds through Community Development and/or Surface Transportation Block Grants to develop strategies to affect inclusionary zoning. A byproduct of this would be a cutdown on urban sprawl. Moreover, financial institutions could be held legally accountable for housing practices that result in a disparate impact for communities of color. This is in response to a Trump administration move to increase the burden of proof for those claiming discrimination via disparate impact.

Biden would create a Public Credit Reporting Agency within the Consumer Financial Protection Bureau (CFPB) to minimize errors and racial disparities of the three private credit reporting companies.

Countering Trump Administration Policies
The Biden plan calls for strengthening and expanding the Community Reinvestment Act (CRA) to ensure that banks and financial institutions are properly serving the communities from which they receive deposits. Again, this is in opposition to a Trump administration proposal to weaken CRA and move to an overly simplistic single-ratio approach of the total dollar amount of CRA activities divided by an institution’s deposits. Biden would also expand CRA to include mortgage and insurance companies.

Rolling back Trump administration housing policies is a recurring theme of the Biden plan. For example, in 2018 the current administration suspended the Affirmatively Furthering Fair Housing rule that required communities receiving certain federal funds to proactively examine housing patterns and address policies that had a discriminatory effect. Biden would reinstate the rule, along with restoring the federal government’s power to enforce settlements against discriminatory lenders, stripped by Trump from the Office of Fair Lending and Equal Opportunity. Without this power, the CFPB could not prevent lenders from charging higher interest rates to minorities than white people.

Getting Granular
Biden’s plans go far beyond the aspirational statements cited above. They get into a granular level to show how the goals would be implemented.

Section 8 housing vouchers would be provided to every eligible family so that no one has to pay more than 30 percent of income for rent. This would apply to both voucher-based and project-based programs. The campaign notes that roughly three in four eligible families now don’t receive Section 8 assistance because the program is underfunded, and that as many as 17 million low-income families could be helped. Another vehicle to reduce rent and utilities to 30 percent or less of income would be a renter’s tax credit.

Housing benefits would be expanded for first responders, public school personnel and other public and national service workers who commit to living in impoverished communities or work in neighborhoods with low affordable housing stock.

President Trump has repeatedly expressed skepticism over human-mediated climate change. Biden, on the other hand, wants to reduce the carbon footprint of the U.S. building stock by 50 percent by 2035 through incentives for deep retrofits and clean power generation that would be added to existing building codes.

Biden proposes to establish a $65 billion fund for new incentives for state housing authorities and the Indian Block Grant program “to construct or rehabilitate low-cost, efficient, resilient and accessible housing in areas where affordable housing is in short supply.” Ten billion dollars would be devoted to making homes more energy efficient, and an additional $5 billion to increase the stock of affordable housing as part of larger community development efforts, such as by expanding the Capital Magnet Fund, which encourages private investment in affordable housing  and economic development in distressed communities. The Housing Trust Fund would be increased by $20 billion through a higher assessment on Fannie Mae and Freddie Mac. As part of his infrastructure initiative, Biden would expand flexible funding for Community Development Block Grants by $10 billion over ten years. Finally, the Low Income Housing Tax Credit (LIHTC) would be expanded by $10 million. Of course, these programs are not without cost. Some of the funding will come from “making sure corporations pay their fair share.”

Biden is not content with the level of military housing and will establish and enforce a tenant bill of rights specifically for military families and require regular reporting of military family satisfaction with their residences.

Biden also would establish national standards and training for housing appraisals, so that neighborhoods of color are not appraised lower as a result of intentional or unintentional bias.

Smart Growth
Biden wants to create a competitive grant program to help local leaders rethink and redesign regional transportation systems at the same time that he would boost highway funding by ten percent. He would use federal transit dollars to leverage local investment in transit and affordable housing as part of a comprehensive planning policy to avoid sprawl, improve the quality of life by reducing distances residents have to travel daily and mitigate climate change. This plan would encourage development of affordable housing around transit corridors. It calls for all municipalities with more than 100,000 in population to have some form of efficient public transportation by 2030.

Rural communities would be ensured of affordable housing through the Agriculture Department’s Rural Housing Service. And funding would be expanded for mission-driven, community-based financial institutions that invest in building new housing in underserved areas. The New Markets Tax Credit (NMTC) would be made permanent and expanded to provide $5 billion in annual support.

Ending Homelessness and Dealing with Domestic Violence
Biden says he will tap the expertise of mayors and local elected officials for best practices the federal government can use to help end homelessness and work with House Financial Services Committee Chairwoman Maxine Waters (D-CA) to pass the Ending Homelessness Act. The bill takes a comprehensive approach, including case management, emergency shelters and additional housing vouchers. The bill would invest $13 billion over five years, including $5 billion for McKinney-Vento Homeless Assistance Grants, in an effort to create more than 400,000 additional housing units for people experiencing homelessness. The bill takes a housing first approach, rather than first insuring individuals are free of addiction and mental illness. Along with this, mental health services will be increased through the Projects for Assistance in Transition from Homelessness program.

Another aspect of the homelessness effort would be to set a national goal of ensuring that all individuals leaving incarceration have housing upon release and reentry to society. This could be a significant step toward cutting down on recidivism and would involve eliminating barriers to the formerly incarcerated receiving housing support.

Biden plans to establish a new coordinated housing initiative to meet the needs of survivors of domestic and sexual violence, who often are hesitant to leave their abusive environments because they have nowhere else to go.

Supportive services will include legal assistance, child-care and employment training. He wants to expand the Violence Against Women Act (VAWA) to provide a complete social safety net that offers subsidized housing and support to move to new areas when necessary for personal safety.

A Value Set
In regarding the plan in totality, the Biden campaign proclaims a belief that “the middle class isn’t a number, but a value set, which includes the ability to own your own home and live in a safe community.” Together with provisions for renters and people experiencing homelessness, Biden is looking to housing as the primary means to stabilize and improve the lives of Americans who need it the most.