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President Joe Biden unveiled a comprehensive plan on May 16 that aims to close the supply gap of affordable homes within the next five years and as well as helping renters who are struggling with high housing costs.
The plan comes at a critical time for the U.S. housing market. According to some estimates, there is a national shortage of approximately seven million affordable homes for low-income households. Meanwhile, the U.S. Census Bureau found that the rental vacancy rate—which measures the number of available rental units—dropped to its lowest point since 1984 during the first quarter of the year. Combined, these issues could force many people into homelessness as rents and home prices continue to climb.
“Now we need the federal government to undo some of the damage done in the past half century—namely, addressing racial inequities and the environmental costs of sprawl.”
“This shortfall [of affordable homes] burdens family budgets, drives up inflation, limits economic growth, maintains residential segregation, and exacerbates climate change,” Biden said in a statement. “Rising housing costs have burdened families of all incomes, with a particular impact on low- and moderate-income families, and people and communities of color.”
Housing has been a central element of Biden’s legislative agenda since he entered the White House in January 2021. Since then, Biden has signed an executive order directing the federal government to redress its legacy of housing discrimination, bolstered the Department of Housing and Urban Development’s ability to prosecute fair housing cases, and restored funding for thousands of local homelessness resolution programs.
But several portions of Biden’s housing legislative package remain tied up in a divided Congress. For instance, the Build Back Better Act contained about $170 billion of new housing initiatives, including funding for an additional 300,000 housing vouchers and $25 billion to expand emergency rental assistance programs across the country. Senator Joe Manchin, Democrat of West Virginia, effectively killed the package and forced the Biden Administration to try to pass the housing investments separately, much to the chagrin of housing experts.
“As rents rise, homelessness increases, public housing deteriorates, and millions of families struggle to keep roofs over their heads, robust federal investments and actions are badly needed and long overdue,” Diane Yentel, CEO of the National Low Income Housing Coalition, said in a statement. “I commend President Biden for taking significant and decisive action, but the administration cannot solve the crisis on its own.”
To help inspire local governments to tackle their own housing issues, Biden’s plan seeks to leverage more than $6 billion in federal transportation funding to reward jurisdictions that eliminate exclusionary zoning ordinances and promote density and rural main street revitalization projects. Localities that have taken these steps previously will be given priority for the grants to continue their work, according to the plan.
“The administration’s commitment to using federal transportation funds to reduce restrictive local zoning laws, which can inhibit or prohibit the construction of apartments and are often deeply rooted in racial exclusion, is especially promising,” Yentel said.
For Nancy Kwak, who teaches urban studies at the University of California San Diego, Biden’s plan represents a promising move to address the nation’s affordability challenges at the federal level. These challenges, Kwak argues, are rooted in the government’s discriminatory housing policies from the 1930s.
For example, New Deal-era federal policies helped promote redlining, increasing the U.S. housing stock while segregating homeowners. The process worked in two ways. On one hand, the Federal Housing Administration, which insured mortgages, told banks in its underwriting manual that the agency would not insure mortgage loans to borrowers of color, which effectively prevented homeowners of color from moving into majority-white neighborhoods.
On the other hand, the Homeowners Loan Corporation, which was responsible for hiring and training home appraisers, created a neighborhood ranking system that made it less desirable for banks to lend to residents in communities of color.
“Clearly, the federal government can make policies that dramatically transform housing access,” Kwak tells The Progressive. “Now we need the federal government to undo some of the damage done in the past half century—namely, addressing racial inequities and the environmental costs of sprawl.”
The impact of urbanization on the environment has drawn increased attention from academics and researchers in recent years. According to a study by Yale University’s Seto Lab, the highest rate of urbanization will most likely occur in “biodiversity hotspots” and could have a wide-reaching impact on the environment.
For instance, increased urbanization could result in a loss of land for agricultural production, thereby putting additional pressure on land resources. Urban expansion could also change local weather patterns, which impacts the local vegetation.
One way that Biden’s plan seeks to thwart the environmental impacts of increased housing development is by focusing on density rather than building new single-unit homes. The plan also seeks to spend $25 billion to finance the production of more than 500,000 homes for low- to moderate-income rental units, including modular homes, manufactured homes, and those that cater to intergenerational households.
“Americans haven’t always lived in low-density residential neighborhoods,” Kwak says. “Biden’s plan rewards communities that step away from this kind of legacy.”