Senator Warren Introduces Sweeping Federal Legislation to Expand Housing Opportunities

Senator Warren introduced sweeping legislation that aims to expand housing opportunities, break down barriers to segregation and address the nation’s housing shortage. The bill would make robust investments to the National Housing Trust Fund and other new funds to increase housing production. Senator Warren also takes aim at fair housing by strengthening the federal anti-discrimination law, offering incentives to remove restrictive zoning practices, and down payment assistance to first time home buyers in communities that have a history of segregation and redlining. 

In an article appearing in The Atlantic, Diane Yentel, president and CEO of the National Low Income Housing Coalition, said the bill “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 proposes offsetting the nearly $500 billion housing investment through reforms to the federal estate tax framework, which currently taxes all transfers of wealth over $1 million dollars at the same rate. The Warren proposal would create a more progressive structure for estate transfers over $1 million.

According to an analysis by Moody’s Analytics, the legislation would increase affordable housing construction by close to 200,000 units in 2019 and rising steadily to 300,000 units in 2021. When the analysis projects over a full ten-year period, affordable housing production increases by about 300,000 units per year.

The Moody’s Analytics analysis also predicts the increased housing construction realized from this proposal would create 730,000 jobs in the first year, and as many as 1.5 million jobs in the mid-2020s.

Here are some of the highlights:

Funding:

• The Housing Trust Fund is a highly targeted federal rental housing and home ownership program. All funds must benefit households with very low incomes (no more than 50% AMI).  This bill would invest $450 billion to preserve and produce up to 2.75 million homes.
• $25 billion in the Capital Management Fund to build 250,000 new homes. This fund provides competitive grants to CDFIs and nonprofit developers to finance and develop housing for low and moderate income households, but also community facilities and other developments that support housing. 
• $4 billion in a new Middle-Class Housing Emergency Fund, to support construction of homes for middle-income households where there is a supply shortage and housing costs are rising faster than incomes.

Fair Housing:

• Strengthens the federal anti-discrimination statute to extend protections to people on the basis of sexual orientation, gender identity, marital status, source of income, and veteran’s status.
• Allows for regional collaborations with housing agencies to make it easier to use housing vouchers in neighborhoods with greater opportunities.  
• Down payment assistance to communities historically denied mortgages by the government. Senator Warren’s bill recognizes the long-standing and existing inequalities that can be traced back to the federal government’s systematic prevention of mortgages to black borrowers.
• Support for families whose housing wealth was destroyed by the financial crisis.  The bill invests $2 billion to support borrowers who are underwater.
• The bill broadens the Community Reinvestment Act (CRA) to cover more financial institutions, promote greater investment to help low and moderate income communities, and strengthens sanctions against institutions that fail to follow the rules.

Incentives for zoning reforms:

• Creates incentives for local governments to eliminate unnecessary land use restrictions that drive up costs.  This bill proposes a $10 billion allocation for a competitive grant program for communities that reform land use controls to provide new housing production. Eligible communities would be able to use grant money for infrastructure improvement, parks, roads, or schools.