On September 25th, Senator Elizabeth Warren (D-MA) introduced a sweeping new bill, entitled the “American Housing and Economic Mobility Act”, which, if enacted, would authorize $500 billion in funding for Federal affordable housing programs over the next ten years. Funding breaks down as follows.
* $445 billion would be allocated to the Housing Trust Fund, spread out evenly over ten years. The objective would be to build/operate/rehab 2.1 million homes for low-income households over this time period, particularly in areas which have been historically underserved (i.e. Tribal Lands, rural communities).
* $25 billion would be allocated to the Capital Magnet Fund, spread out evenly over the ten year period. The funds would be leveraged 10:1 with private capital, with the objective of building 835,000 homes for low and middle-income families over this time period.
* $4 billion would be allocated to a new Middle Class Housing Emergency Fund, which would support the construction of middle-income housing in areas where such housing is in short supply, and where there is a high overall cost of living.
* $523 million would be allocated to various rural housing programs, including $180 million for Section 515 Rural Rental Housing Loans. The objective would be to construct 380,000 new rental units, and assist 17,000 families with home purchases.
* $2 billion would be allocated to the Indian Housing Block Grant Program, with the objective of building/rehabbing 200,000 homes located on Tribal Land.
* $10 billion would be allocated to a new grant program which would be awarded to local governments which reform local land use rules to allow for an increase in construction of new units of affordable housing. Funds awarded can be used for various infrastructure projects.
* $2 billion will be allocated to provide financial assistance to borrowers in rural and suburban communities with negative equity on their mortgages. The objective would be to provide support to those families who are still dealing with the effects of the Great Recession.
The bill proposes that costs be offset by returning estate tax thresholds to their levels at the end of the Bush Administration (2007/2008), and would also institute more progressive rates above those thresholds. Additionally, the bill would strengthen existing fair housing laws (it would prohibit discrimination based on gender identity, sexual orientation, marital status, and source of income), and make it easier to use housing vouchers areas of higher opportunity.
While it is highly unlikely that the Senate Banking Committee (the most probable destination for the bill) will take up the “American Housing and Economic Mobility Act” before the Midterm Elections, it is not unreasonable to expect it to be reintroduced in the next Congress. Should both the Senate and House flip, there may be enough support to move the bill out of committee and to the Senate floor at some point during the next Congress.