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White House Fact Sheet on American Jobs Plan Details $318 Billion for Housing and Community Development Incentives, Includes $55 Billion for LIHTC Proposals
The White House today released a fact sheet that provides details on the $318 billion in housing and community development-related provisions in the American Jobs Plan, including $213 billion of direct spending and $105 billion of proposals for new and expanded tax credits. The American Jobs Plan is President Biden’s multi-trillion-dollar infrastructure proposal, which made the release of the fact sheet fitting as it preceded a speech today on how housing is infrastructure by U.S. Department of Housing and Urban Development (HUD) Secretary Marcia Fudge in Kansas City, Missouri. The fact sheet projects these new and expanded resources will produce, preserve and retrofit more than two million affordable homes in communities nationwide, including more than 500,000 new and rehabilitated homes for low- and moderate-income homebuyers and homeowners. Further details may be included in the full fiscal year (FY) 2022 budget request and Treasury “Greenbook” of tax proposals expected to be released on Friday.
The fact sheet notes that 11 million families pay more than half their income on rent; 3 million families with children under six reside in homes with lead paint; thousands of working families are displaced every year as a result of extreme weather fueled by climate change; and millions of families cannot afford to purchase their own homes. These challenges are even more severe in low-income communities and communities of color, many of which have been segregated, excluded and neglected for generations.
The White House also argues for applying labor provisions to these resources, noting that “employers will be required to pay workers prevailing wages; enter into project labor, community workforce, and local hire agreements; and use workers from registered apprenticeships and other labor or labor-management training programs. Employers receiving funding would also be required to remain neutral when their employees seek to organize a union and bargain collectively and may not require their employees to agree to mandatory individual arbitration.” Davis-Bacon labor provisions largely apply under current law to federal direct spending, such as HUD and U.S. Department of Agriculture (USDA) Rural Development (RD) programs, but not tax incentives, such as the low-income housing tax credit (LIHTC) that are not assisted by HUD or USDA programs.
Highlights of the proposed direct spending and tax incentives follow:
- $55 billion for the expansion of the LIHTC;
- The fact sheet does not specify how this $55 billion will expand or improve the LIHTC, other than to suggest that these increased LIHTC resources should be paired with policies that will lead to more affordable rental homes located in “high-opportunity neighborhoods.”
- The fact sheet also notes that when paired with the increased spending through Housing Trust Fund, HOME, Capital Magnet Fund and new project-based rental assistance detailed below, the LIHTC provisions would produce, preserve and retrofit more than a million affordable rental homes in big cities and small towns across the country.
- While the fact sheet does not explicitly mention the Affordable Housing Credit Improvement Act (AHCIA, S. 1136/H.R. 2573) in the context of its proposed $55 billion LIHTC increase, Congress will likely look to AHCIA to expand LIHTC.
- Novogradac’s analysis of the major unit financing provisions of AHCIA estimates that more than two million affordable rental homes would be financed over the next decade.
- It is also worth noting that the LIHTC provisions in the Moving Forward Act, the comprehensive infrastructure legislation passed by the House in July 2020 cost about $70 billion over 2020-31, which included $7.5 billion for the 4% floor enacted in December 2020.
- Novogradac estimated that the LIHTC provisions in the Moving Forward Act would finance more than a million affordable rental homes over 10 years.
- $45 billion for the Housing Trust Fund;
- $40 billion for the Public Housing Capital Fund;
- $35 billion for the HOME program;
- $20 billion for a new federal tax credit, based on the Neighborhood Homes Investment Act (H.R. 2143/S. 98), to support new construction or substantial rehabilitation of single-family owner-occupied homes in distressed communities;
- $17.5 billion for the U.S. Department of Energy’s Weatherization Assistance program to provide energy efficiency improvements, primarily for single family owner-occupied homes;
- $12 billion for the Capital Magnet Fund;
- $10 billion for a new consumer electrification rebate program based on the HOPE for HOMES Act introduced last year (S. 4052/H.R 7325) by Sen. Van Hollen, D-Maryland, and Rep. Welch, D-Vermont;
- $10 billion for a newly proposed Community Revitalization Fund to support community-led redevelopment investments to restore vacant buildings for social services and community entrepreneurs, provide shared amenities, upgrade access to natural areas, remove toxic waste, build new parks, greenways and community parks;
- $5 billion for an incentive program to encourage the removal of exclusionary zoning and harmful land use policies;
- $3 billion to fund the inspection and removal of lead-based paint from 175,000 homes;
- $2 billion for new project-based Section 8 rental assistance contracts— the first new contracts in 20 years;
- $2 billion for the Section 202 supportive housing for the elderly program, especially to finance new rental homes for the elderly;
- $2 billion to build and rehabilitate rural housing through the USDA’s RD section 502 direct loan and section 504 very low-income home repair programs;
- The section 504 loans are intended to finance energy efficient improvements to rural homes.
- $2 billion for expanding development and rehabilitation of housing in tribal communities;
- $2 billion for a new Community Development Block Grant (CDBG) program for resiliency investments in low- and moderate-income communities vulnerable to climate change;
- $500 million in grants and low-interest loans to renovate multifamily housing to make it more energy efficient and resilient; and
- $250 million for a new Main Street Revitalization Program to renovate small towns’ downtown business districts, including adding affordable housing.
Bipartisan negotiations on infrastructure are ongoing, but as Memorial Day approaches without any agreement, it appears more likely that congressional leadership will turn to considering the American Jobs Plan and the American Families Plan on a partisan basis via budget reconciliation. Many of these proposals have strong support with congressional Democrats and would be likely included in any such infrastructure reconciliation legislation. Stay tuned.