Last week Senator Elizabeth Warren (D-MA) introduced a bill that aims to address housing affordability and build up to 3.2 million new residential units. This legislation would invest: $445 billion in the national Housing Trust Fund (NHT); $25 billion in the Capital Magnet Fund; $2 billion in the Indian Housing Block Grant; $523 million in rural housing programs; and $4 billion in a new "Middle-Class Housing Emergency Fund," which would support the construction of homes in areas facing a shortage of supply and a mismatch between housing costs and incomes. It would also provide down-payment grants to first-time homebuyers living in formerly redlined areas, facilitate the use of federal housing vouchers in high-opportunity neighborhoods and expand the scope of financial institutions covered under the Community Reinvestment Act — which currently only applies to banks — to include credit unions and non-bank mortgage originators. The bill would also create new incentives to encourage local governments to address regulatory and zoning barriers that drive up housing costs and restrict the ability of the private sector to build more affordable rental homes. The bill would be funded by increasing the estate tax, which Moody’s Analytics found would make the program revenue neutral.
Thanks to Senator Warren for her commitment to addressing affordable housing challenges, including her recent co-sponsorship of the Affordable Housing Credit Improvement Act (S. 548) to strengthen and expand the Housing Credit.