President Joe Biden released a $2 trillion infrastructure plan Wednesday that conservatives immediately decried for its intent to raise taxes on businesses and progressives immediately complained was “not enough” to combat climate change. But real estate groups are praising the proposal for its focus on addressing the nation’s dire housing shortage.
The American Jobs Plan proposes a massive overhaul of the systems and facilities that make the country tick, including fixing and upgrading highways, bridges, ports, airports and public transit; eliminating lead pipes in drinking water systems, renewing the electric grid, and providing high-speed broadband to all Americans; building and retrofitting more than two million homes and commercial buildings and upgrading schools, childcare facilities, veterans hospitals and federal buildings; and investing in manufacturing, U.S. supply chains, research and development and job training.
“After decades of disinvestment, our roads, bridges, and water systems are crumbling,” the White House said in a fact sheet about the plan. “Our electric grid is vulnerable to catastrophic outages. Too many lack access to affordable, high-speed Internet and to quality housing.
“The past year has led to job losses and threatened economic security, eroding more than 30 years of progress in women’s labor force participation,” the fact sheet states. “It has unmasked the fragility of our caregiving infrastructure. And, our nation is falling behind its biggest competitors on research and development (R&D), manufacturing, and training. It has never been more important for us to invest in strengthening our infrastructure and competitiveness, and in creating the good-paying, union jobs of the future.”
The White House highlighted the “severe shortage of affordable housing options” in the U.S. Biden’s plan would invest $213 billion to produce, maintain and retrofit more than two million affordable and energy efficient and electrified housing units.
“Millions of families pay more than half their income on rent, and home energy costs are a significant concern for American renters as well,” the fact sheet said. “And, across the country, people are struggling to purchase their first home.”
Biden’s plan calls for Congress to pass the Neighborhood Homes Investment Act (NHIA), which offers $20 billion in tax credits over the next five years for building and rehabbing more than 500,000 homes for low- and middle-income homebuyers.
The plan would also eliminate exclusionary zoning laws such as minimum lot sizes, mandatory parking requirements, and prohibitions on multifamily housing that the Biden administration contends have “inflated housing and construction costs” and prevented families from moving to higher-opportunity areas.
“President Biden is calling on Congress to enact an innovative, new competitive grant program that awards flexible and attractive funding to jurisdictions that take concrete steps to eliminate such needless barriers to producing affordable housing,” the fact sheet said.
The plan also calls for a $40 billion investment to improve public housing infrastructure. “This funding will address critical life-safety concerns, mitigate imminent hazards to residents, and undertake energy efficiency measures which will significantly reduce ongoing operating expenses,” the White House said. “These improvements will disproportionately benefit women, people of color, and people with disabilities.”
Charlie Oppler, president of the 1.4 million-member National Association of Realtors, thanked the Biden administration for emphasizing housing availability and broadband internet access in its proposal.
“NAR thanks President Biden and his administration for recognizing that housing represents a critical piece of our nation’s overall infrastructure,” Oppler said in a statement. “While a lack of inventory and rising prices continue to limit opportunities for homeownership — especially for younger Americans and minority populations — policies that support nationwide housing affordability are now more important than ever.”
In regards to broadband, NAR said it had long supported a comprehensive national policy to stimulate the deployment of broadband in underserved areas and to increase data speeds and lower broadband prices.
“Broadband access is no longer a luxury, it is a critical utility,” Oppler said. “That was true before the pandemic, and even more so now.”
The California Association of Realtors, which has more than 200,000 members, also applauded the administration’s inclusion of housing as part of the infrastructure plan.
“California, like the rest of the nation, is facing a severe housing shortage that must be addressed at every level of government; our nation needs to build more homes to stem the housing crisis facing the country,” said C.A.R. President Dave Walsh in a statement.
“C.A.R. looks forward to working with the Biden Administration and Congress on addressing the housing crisis problems of homelessness, affordable rentals and workforce homeownership.”
In a statement, Sunia Zaterman, executive director of the Council of Large Public Housing Authorities (CLPHA), also praised Biden’s plan for centering housing.
“The $213 billion to produce, preserve, and retrofit more than one million housing units, with $40 billion targeted at the long-neglected public housing capital needs, is the size and scale that can move the needle on improving public housing infrastructure,” Zaterman said.
“CLPHA has called for a 10-year road map to recapitalize the public housing portfolio. The centrality of public and affordable housing means its impact reaches beyond shelter. It is also critical to other key elements of the American jobs plan including expanding broadband, improving childcare, and increasing health care opportunities. Public housing authorities are the most efficient delivery mechanism for these critical services because of their understanding of local needs, especially the needs of underserved communities of color.”
“CLPHA will work closely with Congress to ensure that the housing provisions are fully funded and remain central to the bill,” she added.
Biden’s plan calls for raising the corporate tax rate to 28 percent, up from the 21 percent enacted through the Tax Cuts and Jobs Act of 2017 (it was 35 percent before that). The plan also calls for an increase in the global minimum tax on multinational corporations to 21 percent from 13 percent currently and would get rid of a rule that allows U.S. companies to pay zero taxes on the first 10 percent of profits when they locate investments in foreign countries.
“We look forward to working with Congress and the administration to ensure these proposals are funded responsibly while continuing to promote additional housing inventory,” Oppler said. “In addition, we are encouraged by reports of rising support to end the SALT marriage penalty through this bill, and we urge the administration to work with lawmakers to find a solution.”
The penalty Oppler is referring to is that, under the TCJA, the itemized deduction for state and local taxes was capped at $10,000 for both single taxpayers and those married filing jointly.