It is finally Infrastructure week, month and more than likely the year of Infrastructure. The Biden Administration has come out with the American Jobs Plan, which is an odd name for a package that includes so many sectors of economic development. Nonetheless, for housing advocates and practitioners this has the potential to be the single greatest investment in housing in a generation.
The AJP proposes spending in the neighborhood of $2.25 trillion, including $213 billion for housing. From what we know so far, the plan would:
• Produce, preserve, and retrofit more than a million affordable, resilient, accessible, energy efficient, and electrified housing units through targeted tax credits, formula funding, grants, and project-based rental assistance.
• Build and rehabilitate more than 500,000 homes for low- and middle-income homebuyers through passage of the Neighborhood Homes Investments Act (NHIA).
• Eliminate exclusionary zoning and harmful land use policies through a new competitive grant program that awards funding to jurisdictions that take concrete steps to eliminate barriers to producing affordable housing.
• Address longstanding public housing capital needs through a $40 billion investment to improve infrastructure of the public housing system.
• Upgrade homes through block grant programs, the Weatherization Assistance Program, and through extensions and expansions of home and commercial efficiency tax credits.
• Establish a $27 billion Clean Energy and Sustainability Accelerator to mobilize private investment into distributed energy resources; retrofits of residential, commercial and municipal buildings; and clean transportation.
At this point we are unsure what the administration is referring to by targeted tax credit’s but we have a meeting with the staff of the Domestic Policy Council and the National Economic Council to discuss the soon to be re-released Affordable Housing Credit Improvement Act (AHCIA) and at that meeting we hope to get more information on the President’s proposal. Regarding the size of the AJP, congressional staff we have met with consider the President’s proposal conservative. Yes, the $2.25 trillion is low balling what we expect to come out of the House and Senate in regard to infrastructure and recovery programs. Democrats are going big and it would not surprise me to see a final price tag in the area of $3.5 trillion with housing spending in the area of $400 billion or more.
Speaking of the AHCIA, we expect the bill to be reintroduced the second or third week of April. The new version will include the 50% increase in the 9% allocation over two years and a reduction of the 50% test, likely to 25%. There will be around 27 provisions in all and this time around, with the enthusiasm around a big infrastructure bill, I expect much if not all of the bill to be included in the final package. Senator Wyden is assembling a significant housing package which will likely include his Middle-Income Housing Tax Credit, potentially an increase in the PAB volume cap, a tax credit focused on providing services at LIHTC properties and much more. There will also be housing proposals coming from other members of the House and Senate. As I said previously, this final package could signal a generational change in housing policy and resources.
It is a very exciting time in Washington, this time for the right reasons. Your affordable housing advocates are at the center of the creative process in Congress and the Administration working to expand resources for production. More to come so stay tuned and get ready to advocate.