Senate Democrats this week released their Jobs & Infrastructure Plan for America’s Workers, a $1 trillion plan to invest in and modernize our nation’s infrastructure. Among other investments, Senate Democrats propose $62 billion for affordable housing, neighborhood revitalization, and lead remediation. As Democrats are in the minority in both chambers and do not hold the presidency, their infrastructure plan is unlikely to be enacted, but could be used as a political marker ahead of the midterm elections.
The full cost of the plan would be offset by rolling back some of the tax cuts in the recently enacted Tax Cuts and Jobs Act tax reform legislation. Specifically, it calls for raising the corporate tax rate from 21 to 25 percent; returning the top individual income tax rate to 39.6 percent from the current 37 percent level; restoring to 2017 law the individual Alternative Minimum Tax, Estate, and Gift taxes; and closing the carried interest loophole.
Unlike the Trump Administration’s recently released Infrastructure Plan, which does not reference affordable housing, the Senate Democrats plan calls for "federal support to locally driven initiatives to preserve and expand affordable housing in cities, suburbs, rural communities, and on tribal lands through a combination of direct investment and tax incentives."
The plan asserts that States and localities already have ideas of how to address housing challenges, generate economic development, and enhance quality of life, but they "need the resources to make those ideas a reality." The plan therefore calls for $62 billion in additional federal support over ten years to:
- Provide grants to States and local communities through the HOME Investment Partnerships Program and the Housing Trust Fund to address their affordable housing production and repair priorities;
- Boost funding for initiatives like Choice Neighborhoods and Community Development Block Grants to spur investments and job creation in communities struggling to maintain legacy infrastructure;
- Preserve the Nation’s public housing stock by increasing capital investments to public housing agencies;
- Preserve and expand affordable housing in rural and tribal communities, with investments in USDA’s Rural Housing Service rental housing and homeownership assistance programs and HUD’s Indian Housing Block Grants;
- Make cost-effective investments to address lead-based paint hazards in America’s housing stock.
The Senate Democrats’ plan also calls to strengthen the Low-Income Housing Tax Credit (LIHTC) but does not detail specific strategies for strengthening the program. However, it does note that the recently enacted corporate tax rate reduction is expected to reduce the number of affordable homes produced by the Housing Credit by an estimated 235,000 units over the next 10 years. The plan does not mention private activity tax-exempt bonds, including single-family and multifamily Housing Bonds.