Now that the election is over, what can low-income renters look forward to from the Biden administration?
President-elect Biden’s housing plan would provide more rental assistance to help people pay for costly housing, and would also build new affordable housing around the country. It would reward local governments that took steps to end residential segregation, and take strong steps toward ending homelessness.
If Congress is supportive and acts on most of Biden’s campaign proposals, the federal government will finally make meaningful investments in making sure everyone has an affordable home. However, if Republicans maintain control over the Senate, they will likely block most of the Biden administration’s proposals to help low-income renters.
Although his proposal covers many programs across several federal agencies, Biden’s plan tackles rental housing needs in four main areas:
- Financial assistance for low- and moderate-income renters (and homeowners).
- Increasing the supply of new affordable housing and preserving the current stock.
- Strengthen Fair Housing enforcement and end housing discrimination and residential segregation.
- Pursue a comprehensive plan for ending homelessness.
Biden’s housing plan is extensive. It provides financial assistance to renters, but also invests heavily in building new affordable apartments. It targets funding for services and rapid rehousing efforts to reduce homelessness. It also pledges to enforce fair housing laws that reduce housing discrimination.
Financial Assistance for Renters
Only one-in-four households who qualify for Section 8 rental assistance receive it. This is because Congress has never provided enough money to meet the tremendous need. It often takes two or more years on a waiting list before low-income applicants receive a Section 8 Housing Choice Voucher. President-elect Biden has pledged to make Section 8 an entitlement. This means that anyone who is eligible will be able to get rental assistance at the time they need it.
The Biden housing plan also includes assistance for households that earn too much to qualify for Section 8, but who find themselves still struggling to cover the rent. The Biden plan proposes a refundable Renter’s Tax Credit. It is designed to reduce the cost of rent and utilities to 30% of a tenant’s income. Biden proposes allocating $5 billion to this tax credit each year. This mirrors a renter tax credit proposed by Vice-President-elect Harris while serving as Senator from California.
Increasing the Supply of Affordable Housing
President-elect Biden’s housing plan recognizes that the biggest reason for the high cost of housing is that there is just not enough of it. The Biden plan will invest heavily in building new affordable housing and preserving the affordable units we already have.
Biden supports a $100 billion affordable housing fund to promote construction of affordable rental housing. This includes $65 billion to state housing authorities for new affordable housing in places where it is in short supply. Communities that receive the new housing must have an affordability crisis and agree to change zoning to encourage more affordable housing.
The suggested fund also includes $10 billion to make homes more energy efficient. It also has $5 billion to create new affordable housing as part of larger community development efforts. The affordable housing fund would also include a $20 billion increase for the Housing Trust Fund (HTF). The HTF helps fund construction of affordable rental housing serving mostly those with the lowest incomes.
The Low-Income Housing Tax Credit (LIHTC) program has created nearly 3 million affordable housing units since the mid-1980s. President-elect Biden proposes expanding the tax credit with a $10 billion investment. This will encourage the construction of thousands of new affordable apartments.
Biden also proposes increasing Community Development Block Grant (CDBG) funding by $10 billion over 10 years. State and local governments use these flexible grant funds for a variety of activities, but often for infrastructure projects that support affordable housing developments.
Low-income renters in rural communities will also benefit from Biden’s proposals. The Biden housing plan calls for increased funding for USDA’s rural rental housing programs. This will repair older properties and build new affordable apartments in rural areas. Funding will also be targeted to new housing in rural areas that have had persistent poverty.
Strengthen Fair Housing Enforcement, End Barriers to Affordable Housing
President-elect Biden is also committed to ending long-standing patterns of segregation and enforcing fair housing laws. Much of his fair housing agenda can be done through executive orders and revising regulations. This means that the Biden administration will not need Congress to make many positive fair housing changes.
President-elect Biden proposes working with Congress on a Renters Bill of Rights. This would prohibit landlords from discriminating against tenants who receive public assistance to pay their rent. The Biden administration would also push for funds to provide legal assistance to low-income renters who are facing eviction.
The Trump administration has tried to gut many important fair housing regulations. A priority for the Biden administration will be to reverse these changes. Biden’s housing plan calls for requiring local governments to end exclusionary zoning practices that maintain segregated neighborhoods. If they do not, they will risk losing federal community development funds.
The Biden housing plan also calls for holding financial institutions accountable for serving low-income renters in their communities. Biden proposes strengthening and expanding enforcement of the Community Reinvestment Act (CRA). CRA requires banks to provide services that benefit all people in the community, including low-income renters. Most banks invest in local affordable housing as one of many actions to meet this requirement.
Reducing and Ending Homelessness
The Biden housing plan pledges to “pursue a comprehensive approach to ending homelessness.” The Biden administration will seek $13 billion over five years to tackle the homelessness crisis. Their plan will create more than 400,000 housing units for people experiencing homelessness.
President-elect Biden is also committed to applying the Housing First approach to all federal housing programs. This move recognizes that housing stability makes it more likely that people will benefit from education and services.
The Biden housing plan also commits to reducing homelessness among veterans. It also calls for expanding the supply of supportive housing for seniors and persons with disabilities. In addition, it sets a goal that 100% of formerly incarcerated persons have housing upon reentry. Finally, Biden’s housing plan proposes measures to ensure that survivors of domestic violence and sexual abuse have safe, affordable housing.
How will Biden pay for this?
The Biden Housing plan is expensive, projected to cost $640 billion over 10 years. Biden proposes to raise some tax rates on upper earners to the levels during the Obama years. He will also raise the corporate tax rate from 21% to 28%, which is below the 35% corporate tax rate during the Obama administration.
President-elect Biden has stated that anyone making fewer than $400,000 would face “no new taxes.”
How much of this will likely come true?
A lot of these proposals need to have the support of Congress. The Biden administration will need Congress to authorize new programs for some of these proposals. And Congress needs to approve the funding for all federal programs.
Democrats currently control the House of Representatives and Republicans control the Senate. Democrats lost some House seats in the recent election, but are still the majority. The Senate is split evenly, with Democrats and Republicans each holding 48 seats. Two Senate seats in Georgia are headed to a run-off election in early January. If Democrats win both Georgia Senate races then they will control the Senate, otherwise the Republicans will hold onto their Senate majority.
If Democrats win control of the Senate, then many of Biden’s housing proposals have a chance to become law and receive funding. If Republicans hold onto the Senate majority, then it will be very difficult to pass new housing legislation or get large increases to existing housing programs. As president, Biden can still use Executive Orders to implement progressive housing policies, but the impact of these moves will be more limited than congressional action.
Other things may delay action on the Biden housing agenda. The coronavirus pandemic will likely still be raging on and the economy will still be hurting because of the pandemic. But without federal action before the end of the year, millions of renters will be facing eviction.
Congressional Republicans are reluctant to pass another large coronavirus stimulus package. They point to how the earlier pandemic relief bills added trillions to the national debt on top of the massive Trump tax cuts. However, because stable housing is critical to public health and maintaining economic recovery, the Biden administration may be able to work with Republicans at least on narrower measures. Without federal action, these Republican members of Congress may be hearing from thousands of angry voters facing eviction in the new year.