Why it
matters: The bill would provide $300 billion in federal funding over 10
years to build millions of affordable homes and apartments. It would also make
policy changes aimed at limiting the role of private businesses in the program.
- The initiative comes amid rising
housing costs, which have become a critical issue in the upcoming
presidential election.
- Democratic nominee Kamala Harris has
proposed $25,000 in down payment assistance for first-time homebuyers,
though critics argue the demand-side incentive could further inflate
housing prices.
- The plan could be viewed as the
progressive playbook for housing, especially with Rep. Ocasio-Cortez as a
lead sponsor. While Sen. Smith is viewed as more moderate, she has largely
focused on housing policy on the Senate Banking Committee.
Go deeper: The Homes
Act seeks to create and preserve 1.25 million homes, including over 850,000 for
the lowest-income households.
- Establish an authority within the
Department of Housing and Urban Development (HUD) to acquire a stock of
single-family and multifamily properties, ensuring they come with tenant
protections.
- Cap rents at properties in the program
at a maximum of 25% of the tenant’s annual income and establish
permanently affordable purchase prices.
- Authorize $30 billion in annual
appropriations, combined with a revolving loan fund to recoup and reinvest
funds back into housing.
- Encourage climate resilient and
zero-emissions buildings, and provide housing for those seeking relocation
from climate and extreme weather events.
- Repeal the Faircloth Amendment, which
sets a net limit on increasing federally-built public housing.
- Housing would be managed by
non-profits, housing associations, or cooperatives and have other
provisions favoring tenants, labor, and housing advocacy organizations.
What they’re
saying: In a New
York Times
editorial, Ocasio-Cortez and Smith criticized the federal
government’s long-standing focus on promoting single-family homeownership,
which they argue has left many private tenants struggling.
- The authors partially attribute the
problem of high rents and housing shortages to restrictive zoning laws and
rising building costs.
- Ocasio-Cortez and Smith argue that
this is an opportunity for the federal government to invest in social
housing, providing millions of Americans with safe, affordable homes and
the dignity that comes with secure living conditions.
What’s next:
The plan is extremely unlikely to pass a divided Congress, but
it provides a federal legislative outline for progressives on housing. The bill
will have to be re-introduced next year, where it will face an uphill climb no
matter who is in control of Congress and the White House.
Please
contact David McCarthy (dmccarthy@crefc.org)
and James Montfort at (jmontfort@crefc.org)
with any questions.