Zoning & Codes

Biden’s Funds for Affordable Housing

President Biden’s 213 billion plan is one of the most significant investments in affordable housing in the nation’s history. — Nate Berg in Fast Company

$213 Billion. Yes, it is just a proposal but at least it is on the table instead of under it.

It was such a surprise to wake up to this today. The shorthand for Biden’s plan in the news has been infrastructure. That usually means roads, pipes, wiring—stuff that connects things or provides utilities. And that means jobs across the country, not just in cities or on the two coasts. But Fast Company‘s article by Nate Berg today highlights that it also includes substantial support for affordable housing. We still have the issue of what affordable actually means but it’s an opportunity to heads up on new money coming.

True, the whole plan is  $2.25 trillion and only $213 billion is designated to upgrade and create affordable housing, but who’s counting? I’m not sure I could distinguish between trillions and billions anyway. With $213 billion, affordable housing will be ahead by $213 billion more than it might have been yesterday. The proposal is that the funds can be used to “produce, preserve, and retrofit more than 2 million affordable and sustainable places to live.” It has been noted that the best part of this is that the funds will be available in many forms:  tax credits, grants, and public-private partnerships. The projection is that it will build and update more than 2 million homes.

Will It Happen?

Of course, Biden’s bill hasn’t passed yet and it won’t be easy, partly because there have already been substantial funds dispersed to alleviate ills resulting from the pandemic. And of course, the parsimonious conservatives are against any spending except their own, and the super liberals are against it because it isn’t enough. My bets, however, are all on most of the affordable housing provisions to pass because it creates jobs as well as addressing a major problem for people living in urban areas.

How can it not pass with at least half a million adults and children homeless each night, countless numbers living in substandard temporary shelters, and others living in overcrowded homes cost more than the household can afford while hoping to eat three meals a day? But I have certainly been wrong before. (Watch this space.)

Community Support Will Be Necessary

A defining characteristic of all housing is that it exists next door to other housing. And owners of existing housing protect themselves with zoning restrictions that make it impossible to build. Affordable housing is by definition different than market-rate housing that the upper half of the population can afford, or at least manages to acquire and keep. This means current homeowners have to allow housing next door that that is different in some respect than their own. To move toward approval requires even more.

In order for a community to approve construction plans and apply for the funds, the community has to invest in beginning the process of creating affordable housing. It has to invest in the process instead of just objecting. Anyone who has ever written a grant application—a request for funding from a foundation or government agency—knows that so many details are required that it is easier to apply for the grant after one has completed the project. That is the only way to accurately project how much it will cost and how you will accomplish it. So the desire for affordable housing has to be accepted by a powerful element in the community. Most likely this will be a community organization or non-profit organization that will push the local government to start a process that might take five years to get funded.

(I actually do know a biologist who is always one grant application behind because he only applies for grants for a study or an experiment he has already completed. That’s the only way he can know all the resources, processes, and time periods required, and to accurately predict outcomes. Unless you can accurately predict outcomes—meaning your guess was right before you started—you won’t be in a good place when you apply for another grant. People who give out money want their own record of funding success.)

Zoning and Parking — the Really Big Obstacles

President Biden at his first Cabinet meeting, 1 April 2021

President Biden at his first Cabinet meeting, 1 April 2021.

In addition to NIMBY, the problems of zoning and parking are still obstacles to overcome, even sweetened by $213 billion. Refusals to change zoning or parking regulations are based on personal advantage and not on financial benefits. It is much harder to receive zoning approval for smaller lots, multi-household buildings, or cohousing communities when the neighbors are against higher population density. The prestige of living in a neighborhood of mini McMansions with no cars parked on the street is more important to them.

Wisely Biden’s plan includes incentives for cities to eliminate or reduce exclusionary zoning, requiring minimum lot sizes, reduce parking requirements, and stop restricting homes to legally related people. Fairer and more inclusive zoning laws would be rewarded instead of laws that favor power and exclusion. That the housing must also be resilient, accessible, energy-efficient, and electrified just means it needs to have the qualities that new houses for higher socio-economic classes already have. (How long has it been since doctors and lawyers have purchased homes without electric service?)

The quality missing here is that the construction requirements are based on good practices and not on outmoded materials and techniques. The real issue is population density. Parking restrictions and zoning, including construction requirements, are just legally enforceable ways to avoid it by making construction too expensive.

A Turn from Rentals to Supporting Ownership

“This investment is a huge down payment on an incredible need. This would be the largest new investment in affordable housing that we’ll likely see for a decade. We’re not building public government housing anymore. That’s an old way of thinking. Housing today is financed through a public-private partnership. By investing in housing, this is a once-in-a-generation opportunity to bring more private dollars into infrastructure.” —Priscilla Almodovar, CEO of Enterprise Community Partners

The plan will not focus on funding for public housing except that it will fund projects that upgrade existing public housing. The plan is based on tax credits, competitive grants, and other means of supporting cooperation between local government, nonprofits, and private developers. Thus it hopes to leverage public funding with private resources.

Investment in housing is also the fastest way to create jobs. Governments and businesses have standard processes in place that can be quickly implemented to approve and build new housing. Some projections are that construction creates more than 100,000 new jobs every year.

“This investment is a huge down payment on an incredible need. This would be the largest new investment in affordable housing that we’ll likely see for a decade. We’re not building public government housing anymore. That’s an old way of thinking. Housing today is financed through a public-private partnership. By investing in housing, this is a once-in-a-generation opportunity to bring more private dollars into infrastructure.” —Priscilla Almodovar, CEO of Enterprise Community Partners

A major provision is that it proposes $20 billion of tax credits for 500,000 homes for low- and middle-income home buyers. This is a big break in the practice of using public financing to subsidize rentals. Governments were and are not good landlords. They have no ability to manage housing communities, either humanely or financially. Cooperative management would be more successful. So as I have been advocating, this plan will help more people build wealth and equity. Homeownership of their own homes or someone else’s rented home is substantially responsible for creating the wealth of the middle class and the riches of the upper class.

To Do: Write your Congressional Representatives and Senators. Often.

Sources and more reading;

Note that each article discusses a different aspect of the bill:

Biden’s $213 billion plan to save affordable housing, by Nate Berg, Fast Company, 2 April 2021

By The Numbers: Biden’s $2 Trillion Infrastructure Plan, by Benjamin Swazey and Clair Oby. On NPR website, 1 April 2021.

Biden’s plan to fix America’s broken internet, briefly explained by Sara Morrison on Vox, 2 April 2921.

Women in construction could get a big boost from Biden’s infrastructure plan by Marie Solis in Fortune, 2 April 2021.

Categories: Zoning & Codes

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