The Biden administration continues to shine a light on how state and local regulations inflate the cost of housing. He also gives less and less detail on exactly how he intends to encourage these jurisdictions to reduce this red tape.
On Wednesday, the White House released a fact sheet on the housing elements of its $ 2.3 trillion U.S. Jobs Plan, which proposes $ 213 billion in direct spending on housing programs plus an additional $ 100 billion in tax credits.
“If we want the United States to remain the greatest nation in the world, we must first take care of the house in the most literal sense of the word,” said the Secretary of Housing and Urban Development (HUD), Marcia Fudge, at an event in Kansas City, Missouri. , yesterday. “Adopting an infrastructure plan that fails to expand affordable housing and revitalize our communities would be like building a road that leads nowhere.”
Most of the new spending proposed by the administration would be used to strengthen existing housing programs.
White House offers some $ 55 billion in additional tax credits for the US Treasury’s low-income housing tax credit program, $ 35 billion for HUD’s HOME investment partnership grant program and $ 45 billion for the Housing Trust Fund, which primarily funds rental housing initiatives.
Hidden in all of this spending are calls for a new program that would allocate $ 5 billion in “flexible and attractive funding to jurisdictions that take concrete action to reduce barriers to affordable housing production.” The White House fact sheet lists some specific barriers: minimum lot size, mandatory parking requirements, bans on multi-family housing. This language – minus the explicit price of $ 5 billion for the program – is almost identical to an earlier fact sheet released by the White House in April.
“Cities have to show that they’re removing some of their exclusionary zoning requirements, and then they can access that separate pot of money for whatever they want to do with it – transportation, parks, schools,” said an administration official. Told Vox last month when describing how this new program works.
It sounds like a piece of the U.S. Housing and Economic Mobility Act, which Senator Elizabeth Warren (D-Mass.) Introduced in 2018. This bill would have created a $ 10 billion program to reward states and local governments that have adopted, or a plan to adopt, a menu of policies aimed at increasing affordability.
Policies that jurisdictions might adopt to qualify for this money include some free market reforms, such as the legalization of secondary suites, as well as more dubious ideas, such as requiring new private housing developments to include. affordable units. The money awarded under this program could then be spent on schools and public works, among others.
Another version of these “YIMBY grants” can be found in a bill presented by the senses. Amy Klobuchar (D – Mass.), Tim Kaine (D – Va.) And Rob Portman (R – Ohio).
Their Housing Supply and Affordability Act would give $ 1.5 billion over five years in grants to states and communities that create housing policy plans aimed at increasing housing supply and affordability and lowering barriers to housing development. The money granted through this bill could only be spent on the creation or implementation of these housing policy plans.
Klobuchar and Portman’s bill was born out of an idea of President Barack Obama’s administration, which Joe Biden then explicitly took approved on the country trail.
Report of BloombergKriston Capps from suggests that the $ 5 billion program in Biden’s US Jobs Plan would pay these implementation grants as well as less restricted scholarships of the type included in Warren’s Bill.
Biden’s campaign platform also endorsed a 2019 proposal by Sen. Cory Booker (D – NJ) and Rep. Jim Clyburn (D – SC) that would make federal funding for housing and transportation conditional on the adoption of strategies. affordable housing. But this idea has not yet appeared in any American Jobs Act document.
Besides the $ 5 billion figure, there are plenty of details yet to be clarified, says Mike Kingsella, executive director of Up for Growth Action.
“The White House gives the direction, it will be up to Congress and the relevant committees to draft the text,” he said. Reason, adding that his organization is pushing for the Klobuchar-Portman Bill to be incorporated into the final legislative version of the US Jobs Plan.
This bill “has the broadest support, has been introduced and is based on last year’s Biden housing plan,” he said.
All of this can appear like a lot of regulatory and legislative minutiae. But the effectiveness of any potential YIMBY grant will really depend on those details of how that money is allocated and who it goes to.
“The big limitation is that the richer and more exclusive jurisdictions will not be swayed by a federal grant to change their policies,” says Emily Hamilton, housing policy researcher at the Mercatus Center at George Mason University. “In light of this, it is really important that the federal government target these grants in the jurisdictions that are really involved in land use planning and licensing.”
That would mean restricting those grants to municipalities in general, she said. Governments are responsible for writing zoning codes and approving individual housing projects. Grants in both the Klobuchar-Portman bill and Warren’s bill, by contrast, could go to states as well as cities and counties.
Most of the current proposals swirling around Congress and the White House rewarded jurisdictions for reforming their planning codes, or at least planning to reform them. Instead, Hamilton suggests conditioning that money on the actual rates – and price points – of new construction.
The grants should go to “places that allow more housing to be built at a lower cost rather than places that change planning documents but maintain barriers that block housing construction,” she said.
Of course, all other spending in the U.S. Jobs Plan could stifle any incentive that even the best-designed YIMBY grant program would create for local governments to scrap their onerous land use rules. Why would a city get rid of its precious single-family zoning to qualify for a conditional federal grant when it could also get much larger federal funds that are not at all conditioned to do anything?