Good and Bad Housing Provisions in $3.5 Trillion Reconciliation Plan

Housing Affordability

As NAHBNow reported previously, House Democrats are working to draft a $3.5 trillion Build Back Better plan that includes onerous tax hikes of $2 trillion and aggressive energy efficiency requirements in model building energy codes that would harm housing affordability.

This ambitious plan, which focuses on what the White House refers to as “human infrastructure,” also contains several other elements of interest to the housing community.

Affordable Housing Provisions

House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) seeks to include portions of the Housing is Infrastructure Act of 2021 into the broader Build Back Better legislative package.

The base text contains:

  • $300 billion in affordable housing funding, including $34.77 billion for the HOME Investment Partnerships Program, $75 billion for Housing Choice Vouchers and $15 billion for new Project Based Section 8 contracts.
  • $4.8 billion for rural multifamily housing.
  • $8.5 billion for the Community Development Block Grant (CDBG) program.
  • $4.5 billion for NAHB-supported CDBG competitive grants that would require local jurisdictions to eliminate impact fees and restrictive zoning requirements.
  • $200 million in grant funding through the Department of Agriculture’s Sections 502, 504 and 523 programs to help low-income home owners in rural areas purchase, repair, upgrade and preserve modest, affordable homes, including manufactured homes.
  • $50 million to support sweat equity and volunteer-based homeownership programs for low-income households.
  • $770 million for fair housing initiatives.

The chairwoman’s legislation would also forgive the National Flood Insurance Program’s (NFIP) debt and includes $3 billion for flood mapping and risk analysis. It also provides $1 billion to launch a subsidy program to help low- and moderate-income households buy flood insurance and close the coverage gap that leaves poorer households and communities more vulnerable to flood damage.

The package also provides first-time, first-generation home buyers with the greater of $20,000 or 10% of the purchase price of an eligible home, including down payment costs, closing costs and costs to reduce the rates of interest.

The Waters bill also provides $500 million to subsidize 20-year mortgages for first-generation home buyers in order to accelerate home equity. It also includes $100 million for HUD to carry out a pilot program to expand small-dollar lending options to everyday home buyers.

View the fact sheet for the Housing is Infrastructure Act of 2021.

Labor/Immigration Provisions

The House Education and Labor Committee is proposing dramatic increases in monetary penalties for employers who violate the National Labor Relations Act with unfair labor practices. These proposed fine increases are so large that NAHB believes businesses facing fines may be forced to close.

For example, the civil fees for each willful violation would go from a maximum of $7,000 to $70,000, and the minimum fee would jump from $5,000 to $50,000.

As proposed, these civil penalties are excessive. NAHB is urging Congress to reassess these penalties.

On a positive note, the bill also includes funding investments for career technical education as well as funding for JobCorps and Youthbuild. NAHB supports efforts to provide additional funding for these programs because such support will help provide good jobs for new workers and help address labor shortages in various industries including residential construction.

The House Judiciary Committee’s proposed reconciliation legislation could allow four groups of immigrants to become permanent U.S. residents — Deferred Action for Childhood Arrivals (DACA) also known as “Dreamers” (undocumented immigrants who were brought to the U.S. illegally as children and who grew up knowing America as their only home); essential workers; temporary protected status (TPS) individuals (nationals of specifically designated countries that are confronting an ongoing armed conflict, environmental disaster, or extraordinary and temporary conditions); and deferred enforcement departure (DED) individuals.

Immigrants are an essential part of the construction industry workforce. TPS beneficiaries and DACA participants with legal work authorization have helped to fill part of the construction industry’s growing labor gap. As construction was designated as an essential industry by the U.S. Department of Homeland Security, our industry will also benefit from essential workers becoming permanent U.S. residents.

Separately, the reconciliation package would also provide additional funds for forestry management/wildfire prevention efforts. It also includes investments in core and traditional transportation and infrastructure programs that NAHB supports because thriving real estate markets depend on high-quality, accessible and efficient infrastructure.

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