Legislation Would Produce More Than 3 Million New Housing Units, Reduce Rents for Working Families by 10%, and Create 1.5 Million New Jobs with No Deficit Impact; Bill Would Also Promote Home Ownership and Reverse Decades of Discriminatory Housing Policy
Washington, DC – United States Senator Elizabeth Warren (D-Mass.) today introduced the American Housing and Economic Mobility Act to help bring down costs for renters and buyers and level the playing field so working families everywhere can find a decent place to live at a decent price. According to an independent analysis of the legislation from Mark Zandi, Chief Economist of non-partisan Moody’s Analytics, the bill would build or rehabilitate more than 3 million units over the next decade and fully close the current gap between housing demand and supply, create 1.5 million new jobs at its peak impact, bring down rents for lower-income and middle-class families by 10% – saving families an average of $100 per month – and produce no long-term deficit impact.
“Housing is the biggest expense for most working families – and costs for everyone, everywhere are skyrocketing. Rural housing is falling apart and decades of discrimination has excluded generations of Black families from homeownership. My bill would cut rents by 10% and give families in urban, rural, and suburban communities more economic security,” said Senator Warren. “This proposal will attack the rising cost of housing by helping to roll back needlessly restrictive local zoning rules and taking down other barriers that keep American families from living in neighborhoods with good jobs and good schools. After bungling housing policy for decades, it’s time for Congress to make things right and pass my bill.”
“Your legislation will help bring down costs for buyers and renters alike, and it will open up opportunities so that all communities have a chance to benefit from the financial stability and peace of mind that comes with owning a home. And it will take a critical step towards addressing the legacy of federal, state, and local governments systematically denying housing opportunities to families of color.” – Letter from Civil Rights groups
“Senator Warren’s bill to address our nation’s affordable housing crisis is monumental and unprecedented. If passed, this would be the first act of legislation since the 1968 Fair Housing Act to redress a century of housing discrimination. While the FHA ended housing discrimination, it did not have a mechanism to remedy its lasting effects. Senator Warren’s bold and practical legislation is the necessary next step toward achieving equity. By focusing on down payment assistance, CRA reform, and non-discriminatory housing vouchers, this legislation will not only help families buy affordable homes but will also build community wealth. This legislation has the potential to benefit struggling communities across the country by reversing a century of racial segregation and alleviating the harsh effects of poverty and lack of housing.” – Mehrsa Baradaran, Author of The Color of Money. Read full letter here.
“The bill is a historic investment that will improve the quality of rural housing and decrease housing costs for rural families.” – Robert A. Rapoza, Executive Secretary of the National Rural Housing Coalition. Read full letter here.
The American Housing and Economic Mobility Act will:
- Increase federal funding to build or rehabilitate 3.2 million new housing units for lower-income and middle-class families and bring down rents by 10% in urban, suburban and rural areas.
- Put $10 billion into a new competitive grant program that communities can use to build infrastructure, parks, roads, or schools – as long as local governments reform land use rules that make construction of new affordable housing needlessly more expensive.
- Provide down payment grants to first-time homebuyers living in lower-income, formerly redlined or officially segregated areas to allow those families to start building home equity and close the racial wealth gap.
- Invest $2 billion to support borrowers whose wealth was destroyed in the 2008 financial crisis and who still have negative equity on their mortgages.
- Expand the Fair Housing Act to prohibit housing discrimination on the basis of sexual orientation, gender identity, marital status, and source of income, including government assistance.
- Strengthen the Community Reinvestment Act to cover more financial institutions, promote investment in activities that help poor and middle-class communities, and strengthen sanctions against institutions that fail to follow the rules.
- Make it easier to use housing vouchers in neighborhoods with good schools and good jobs and allows tribal housing authorities to administer their own vouchers programs.
Senator Warren’s legislation “would help millions of the lowest income seniors, people with disabilities, families with children, and individuals who struggle to pay rent and the half a million people without a home at all….Senator Warren’s proposal has the power to transform lives and communities.”– Diane Yentel, president and CEO, National Low Income Housing Coalition
“Senator Warren has outlined a broader commitment to safe and more accessible economic opportunity in neighborhoods, communities, cities and rural areas across the country. This legislation should have the support of every fair-minded member of the Senate.” – Jesse Van Tol, CEO, National Community Reinvestment Coalition
“This simulation [of the effect of the American Housing and Economic Mobility Act] likely understates the economic benefit of the legislation, because it does not consider that the measure will facilitate the ability of low- and middle-income households to move closer to their employment or potential jobs. The housing shortage and erosion in affordability are con¬straining the ability of low-income house¬holds to take the record number of open job positions that are currently available in places where housing is simply too expen¬sive. Affordability is also forcing low- and middle-income workers to live farther away from their work, requiring long and costly commutes, and reducing productivity.” – Mark Zandi, Chief Economist of Moody’s Analytics. Read full analysis here.
“Families in urban and rural communities across the country are stretched to the limit by soaring rents, leaving little left over to pay for food, medicine, or childcare. I’m proud to support Senator Warren’s bill, which will reduce rents for millions of Americans and open new doors to home ownership so that more people can have stable and healthy homes for themselves and their families.” – Matthew Desmond, Author of Evicted
“The United States needs a much more robust housing policy. We applaud Senator Warren for introducing legislation that outlines major policy changes and provides a blueprint for housing stability.” – Shamus Roller, Executive Director of the National Housing Law Project
“Senator Warren’s bill will increase the supply of affordable housing, giving communities an essential tool for ending homelessness.”– Nan Roman, President, National Alliance to End Homelessness
“Transgender people face extremely high levels of discrimination in housing, and are disproportionately more likely to be homeless. In the 2015 U.S. Trans Survey, nearly one-quarter of respondents reported experiencing some form of housing discrimination in the past year, such as being evicted or denied a home, and 30% reported being homeless at some point in their lives. Clarifying the Fair Housing Act is essential to ensure everyone, no matter who they are, can access housing without discrimination.” – Harper Jean Tobin, Director of Policy, National Center for Transgender Equality
“Everyone deserves to have a place to call home and too many LGBTQ people will continue to be left out in the cold if we don’t dismantle the systems of oppression that keep marginalized communities in poverty. That’s why the National LGBTQ Task Force Action Fund strongly supports the Housing and Economic Mobility Act of 2018, which takes significant steps toward dismantling the history of racism, homophobia, transphobia, and class bias that have been built into our national housing market.”– National LGBTQ Task Force Action Fund
“Key parts of Senator Warren’s proposed legislation demonstrate her confidence in the work of housing finance agencies. They serve as a reliable delivery system for critically needed federal resources which help low- and moderate-income families find an affordable home. This is a reflected in MassHousing’s work and that of our sister agencies across the country.”– MassHousing
This bill will help address the shortage of millions of affordable homes nationwide by investing $445 billion over ten years in the Housing Trust Fund to provide up to 2.17 million homes for low-income families. It invests an additional $25 billion over ten years in the Capital Magnet Fund – leveraged 10:1 with private capital – to build up to 835,000 new homes. The bill puts $4 billion in a new Middle-Class Housing Emergency Fund to build homes for middle-class buyers and renters where there’s a supply shortage and housing costs are rising significantly faster than incomes. It invests $523 million in rural housing programs, doubling the number of home loans available through the programs and preserving 450,000 affordable rural rental units, and puts $2 billion into the Indian Housing Block Grant program to build thousands of homes in those communities.
To fully offset the cost of this historic effort, the bill returns the estate tax thresholds to their levels at the end of the George W. Bush administration and institutes more progressive rates above those thresholds. These changes will affect only about 10,000 of the wealthiest families in the country.