AFFORDABLE HOUSING SHOULDN’T BE AN OXYMORON
On Wednesday, President Joe Biden announced and outlined the next priority on his legislative agenda: a climate-centered infrastructure bill.
At $2 trillion-plus, the American Jobs Plan is a far-reaching proposal to modernize and transform the built environment and infrastructure of the United States. The scope of it is impressive. The plan would, if passed, provide a total of
$115 billion for roads and bridges, $85 billion for public transit, $80 billion for passenger and freight rail and $111 billion for water infrastructure including $45 billion for lead abatement, to prevent another Flint, Michigan, or Jackson, Mississippi.
It would also provide $174 billion in electric vehicle incentives, $100 billion in funding for electric grid and clean energy improvements, and more than $300 billion in funds to promote manufacturing in everything from climate technology to vaccines and semiconductors.
Part of what makes the American Jobs Plan so far-reaching, besides the cost, is its expansive definition of “infrastructure.” In addition to billions for transportation and manufacturing, the bill includes $400 billion for in-home caregiving for older and disabled Americans and better pay and benefits for the caregivers themselves.
I want to focus on one investment in particular. Biden wants $213 billion to “build, preserve and retrofit more than 2 million homes and commercial buildings,” according to the White House fact sheet on the plan. He would pair this with incentives and regulations to “eliminate state and local exclusionary zoning laws,” which raise the price of housing through strict limits on the amount of housing that can be built in the first place and the form that homes take when they do get built. The plan also includes “project labor agreements with a free and fair choice to join a union and bargain collectively.”
Housing received short shrift during the Democratic primary campaign.
In 2019, according to Harvard’s 2020 State of the Nation’s Housing report, 37.1 million households — or roughly 30% of all U.S. households — were “housing cost burdened,” meaning that they spent 30% or more of their income on housing. Of those, 17.6 million were “severely cost burdened,” spending half or more of their income on housing. Renters were more cost burdened than homeowners, and low-income renters were in the worst position of all. About 81% of renters earning less than $30,000 a year were cost burdened, and most were severely cost burdened.
Low-incomes and stagnant wages are one part of the problem. Rising rents and home prices are the other. And behind those rising costs lie a severe shortage of homes, affordable or otherwise. Across the country, the number of homes for sale has plummeted, from a total of nearly 1.5 million in 2016 to 468,000 in 2021.
The United States is also building substantially fewer homes than it did. This is especially true in the rental market, where there is a serious shortage of affordable housing. According to the National Low Income Housing Coalition, the United States has a shortage of 6.8 million homes for extremely low-income renters. Shortages are worst in large, fast-growing states like California, Florida and Texas, as well as Oregon, Nevada and Colorado.
Another culprit is the cost of building homes, which has gone up over the past few years. Still another is the collapse of state and local funding for subsidized housing, a casualty of the Great Recession and the austerity that followed. But one of the largest obstacles to building new affordable housing, or housing period, is the web of exclusionary restrictions and stringent requirements that add up to onerous burdens on new housing development. When cities require large lawns and ample parking, they drive up the price of new homes. When they zone for single-family housing and ban two-, three- or four-unit homes, they drive up the price of housing. And when cities force builders to go through a byzantine approval process for any new development, they raise the price of housing.
If passed into law, the housing elements of the American Jobs Plan would be the largest federal investment in affordable housing in a generation.
The fact of the matter is that any serious attempt to reduce inequality and increase workers’ share of income has to make housing a priority. High costs are a tax on workers, paid to landlords, banks and affluent homeowners who reap the gains of tight supply and high demand.
It’s that last point that raises an important question about the politics of the administration’s housing proposal. The college-educated, high-income voters who helped put Biden in office are also some of the same voters who oppose most new affordable housing construction, especially when it might be near them — voters whose supposed liberal openness does not extend to their own neighborhood. This is true in cities as large as San Francisco or as small as Charlottesville, Virginia, where I live.
The Biden coalition is not likely to fracture over the size of the infrastructure bill or the taxes needed to pay for it. But if there is any issue that might reveal the tensions and fault-lines inside Biden’s big tent, it is the question of housing — and where, exactly, the least fortunate Americans are supposed to live.