Biden Administration Proposes $318 Billion for Affordable Housing in American Jobs Plan
HUD Secretary Marcia Fudge unveiled on May 26 details of the housing provisions in the administration’s proposed “American Jobs Plan,” President Biden’s $2.3 trillion infrastructure proposal. While the administration previously proposed a total of $213 billion in housing investments, Secretary Fudge announced a proposed increase to $318 billion, along with details of the spending request. The plan includes 1) $45 billion for the national Housing Trust Fund for construction and preservation of homes affordable to people with the lowest incomes, and 2) major investments to rehabilitate and preserve the nation’s public housing stock. The plan does not include expanding rental assistance to all eligible households.
The plan would also provide $2 billion for new project-based vouchers to provide long-term affordability and ensure that very low- and extremely low-income households are able to access new affordable homes. The American Jobs Plan proposes a $35 billion investment in the HOME Investment Partnership Program, along with $12 billion for the Capital Magnet Fund and $3 billion to fund lead-based paint testing and abatement in an estimated 175,000 housing units. The proposal would allocate $2 billion to meet the housing needs of tribal communities and $2 billion for HUD’s Section 202 program to increase the supply of affordable housing with supportive services for low-income seniors.
The bill proposes investing $10 billion in a new Community Revitalization Fund to support community-led redevelopment projects that create innovative solutions to the affordable housing crisis. Rural communities would receive significant funding for the construction and preservation of affordable housing, including $2 billion to build and rehabilitate homes in rural areas and $250 million for a new Main Street Revitalization Program that would provide grants for communities to revitalize business districts and construct additional affordable housing.
To mitigate the impact of climate change, the bill proposes $2 billion for the creation of a new Community Development Block Grant (CDBG) Resiliency program specifically for communities vulnerable to the impact of climate change. The Department of Energy’s weatherization program would receive an additional $17.5 billion, along with $500 million in grants and loans to help renovate multifamily homes with energy-efficient and weather-resilient upgrades. The bill would create a $10 billion consumer electrification rebate program to make housing more energy efficient.
Additionally, the plan would provide over $100 billion in housing-related tax credits to finance the construction of affordable housing. In addition to a $55 billion expansion of the Low Income Housing Tax Credit (LIHTC) program, the nation’s primary tool for constructing affordable housing, the American Jobs Plan would create a new federal tax credit program modeled after one proposed in the Neighborhood Homes Investment Act to encourage construction and rehabilitation of homes in underserved communities to increase homeownership opportunities for low- and moderate-income households. To combat exclusionary zoning, the bill would create a $5 billion incentive program to award funding to jurisdictions that take concrete steps to reduce zoning barriers to affordable housing construction.