Elim Garak
Veteran
Democrats in Congress introduced far-reaching legislation on Wednesday to designate a new federal housing authority, one that would provide billions in funding and financing for affordable homes across the US.
The long-shot bill proposes a public alternative to private developers to meet the immense need for US affordable housing, especially for the nation’s poorest households. Under the legislation, a new social housing authority would function as both a bank and developer for resident-owned coops, community land trusts, public housing and other market alternatives.
“This bill recognizes that there is no one-size-fits-all solution to the housing crisis, and it is aimed to uplift the diverse set of living, breathing communities that working Americans have been building for decades,” said Representative Alexandria Ocasio-Cortez of New York.
Ocasio-Cortez and Senator Tina Smith of Minnesota introduced the bill on the steps of the Capitol on Wednesday. If it were to pass, the Homes Act of 2024 would enable the federal government to acquire real estate for permanently affordable housing, develop new subsidized homes and apartments, and finance deeply affordable projects for rent or purchase.
“Instead of treating real estate as a commodity in a speculative market, we would underwrite construction of millions of homes so they can stay affordable for the long term,” said Smith.
The legislation will face slim odds in Congress: The bill calls for $30 billion in annual appropriations, plus a parallel loan fund backed by the US Department of the Treasury. Such an outlay would be on par with what the federal government spends every year on the mortgage interest deduction — or equal to about half the current annual funding level for the US Department of Housing and Urban Development.
The bill’s supporters say that its size meets the nature of the problem. “Everyone knows that housing is difficult,” says Gianpaolo Baiocchi, a sociologist and director of the Urban Democracy Lab at New York University who has worked with Ocasio-Cortez’s office on the bill. “What would an alternative look like?”
Under the terms of the legislation, a new agency under HUD would provide upfront grants and low-cost loans. Projects across its portfolio would be required to set aside 40% of their units for extremely low-income households and 30% of units for low-income households.
For affordable housing projects financed by the agency, rents would pay back the loans. The lawmakers estimate that the bill would generate 1.25 million housing units over 10 years, including some 876,000 homes for extremely and very low-income households (those earning less than 30% and 50% of area median incomes, respectively).
The bill from Ocasio-Cortez and Smith draws on the Green New Deal for Public Housing, a proposal first introduced by Ocasio-Cortez and Vermont Senator Bernie Sanders in 2019, as well as more recent research on a public option for housing.
In a March 2021 op-ed for The New York Times, one year into the pandemic, Baiocchi and co-author H. Jacob Carlson called for the creation of a social housing development authority. Pointing to the fallout of the 2008 financial crisis, when investors bought tens of thousands of homes at depressed prices due to foreclosure, the sociologists described a federal agency that would buy distressed properties and transfer them to public or nonprofit sectors to be managed as permanently affordable homes.
“Expanding housing supply both includes new construction and preserving existing stock, since we lose 350,000 units each year to disrepair,” said Carlson, an assistant professor of sociology at Kean University, in an email, pointing to research from Freddie Mac.
Baiocchi and Carlson worked with researchers Ruthy Gourevitch and Daniel Aldana Cohen on a report for the Climate and Community Institute, a progressive think tank, outlining just how a green social housing development authority might work.
While there are any number of local models in the US for nonprofit housing — the Champlain Housing Trust in Burlington, Vermont, for example, or the Urban Homesteading Assistance Board in New York City — the US does not offer the same level of support at the federal level for these endeavors as other wealthy nations.
“From public housing in places like New York and Puerto Rico, to rural housing cooperatives in the Midwest, to community land trusts and tenants unions in California — any home that is built for people, not profit, will be able to benefit from this authority,” said Ocasio-Cortez.
Baiocchi points to popular models for social housing in Austria, Denmark and Sweden, noting that the US would not need to adopt another model whole cloth in order to support local affordable housing options.
“We don’t have the federal infrastructure to get there,” Baiocchi says. “The social housing authority idea was to build the road while we walk it.”
Source: Bloomberg - Are you a robot?
