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A Look At President Biden’s $213 billion Affordable Housing Plan

The United States is currently in a housing deficit of 1.5 million homes because there is a lack of available, affordable homes; what's more, the price of homes is currently on track to continue to increase. President Biden's $213 billion Affordable Housing Plan focuses on addressing the cost of building housing units, guaranteeing the housing units stay affordable, and financing the production costs of building housing units. Many experts have praised President Biden's housing plan as a significant step in fixing the current housing deficit.

Overview:

President Biden’s $213 billion Affordable Housing Plan aims to reduce the number of people affected by homelessness by creating and preserving affordable housing units. President Biden’s ambitious housing plan hopes to close the housing supply gap in five years, and within three years, Biden hopes to create hundreds of thousands of affordable housing units. 

To make the most significant impact, Biden’s Administration works closely with state, local, for-profit, and nonprofit partners to localize the efforts and provide a more tailored relief effort. 

A key component of President Biden’s housing plan is the usage of manufactured homes. These homes would be built factory-style and then assembled. This will cut down on building costs and decrease the house’s overall price. In addition, these homes will rely on chattel loans, a loan specific for a movable piece of property, meaning the owners do not own the land the manufactured home resides. Biden also intends to rely on accessory dwelling units (ADUs); by doing this, Biden hopes to negate the cost of home ownership and expand the number of affordable housing solutions. Finally, in the Plan, Biden also hopes to promote building smaller multifamily buildings and condominiums. 

The Affordable Housing Plan also plans on developing and rehabilitating multi-family homes. This means that instead of building new homes, the Plan dedicates a percentage of the budget to rehabilitating homes while also ensuring the prices stay affordable. Moreover, the Plan aims to provide that the current property owners stay the owners or that local organizations take over ownership. The Plan clearly states that Biden will supply “owner-occupants and mission-driven entities instead of large investors.” 

 The Plan also announces a continued partnership with Freddie Mac, Fannie Mae, and Ginnie Mae. Congress created the enterprise in 1970 to keep mortgage money moving and support the US housing economy. Freddie Mac will purchase support for personal property, manufactured housing and chattel loans, which will support product design and future loan purchasing capabilities. These actions taken by the Freddie Mac enterprise will result in greater liquidity within the Manufactured Homes world, which means that manufacturers of Manufactured Homes will be able to modernize and expand their product lines and respond to supply chain issues. 

A significant way Biden is promoting the building of these affordable housing solutions is through tax incentives, expanding federal funding, reforming zoning and land use policies, reducing regulatory boundaries as well as lowering the cost of land. The primary goal is to minimize barriers such as zoning and cost to incentives contractors to build affordably. 

Biden’s Plan also provides competitive grants to states that have shown efforts in rehabilitating housing, moving to provide more affordable housing, increasing public transportation, improving infrastructure or improving environmental planning and mitigation. 

While the majority of Biden’s Housing Plan does seem to be preventative, a section of his Plan does stipulate that federal property may be disposed of for the re-use of housing for people who suffer from homelessness. This is due to the Title V of the McKinney Vento Act, which allows “eligible organizations to use unutilized, underutilized, excess, and surplus Federal properties to assist persons experiencing homelessness” ( US Department of Housing and Urban Development). Biden, in conjunction with the US Department of Housing and Urban Development (HUD), General Services Administration (GSA), and the United States Department of Health and Human Services (HHS), intend to issue a new regulation for Title V to make the disposition process easier for developers, build up the process of identifying suitable properties and enhance technical assistance. 

President Biden has also focused on the lack of affordable housing within Indian Country by presenting the Indian Housing Block Grant (IHBG) funding to construct new affordable housing and continue making financing available to the IHBG. 

While currently passed in the House but not in Congress, the Biden Administration aims to recruit more workers into good-paying construction jobs. The bill would increase the funding for the number of Registered Apprenticeships for technical career education. It would also fund pre-apprenticeship programs such as YouthBuild and JobCorps. 

How the Plan Affects San Francisco:

When Biden first announced his Plan, California Governor Gavin Newsom and prominent California city Mayors, San Francisco, San Jose, and Oakland pledged their support. 

San Francisco Mayor London Breed poured $1 billion into services assisting those who suffer from homelessness. She also promised to create 6,000 new housing and shelter placements and house 1,500 people. 

On the other side of the Bay, Oakland has already received 515 emergency housing vouchers and $11.3 million in affordable housing grants. 

Criticisms:

While Biden’s Plan addresses financial and regulatory concerns, resulting in more affordable options, Biden’s Plan fails to address mental health issues and drug addiction. Biden’s Plan also fails to address the loss of housing as a symptom for those who do not have access to mental health care or drug rehabilitation. 

In Los Angeles, many of the free housing surrounding LA’s Skid Row is overrun with drugs. Of course, this alone presents a problem. But, will the lodging provided promote the use of drugs? 

Moreover, Biden’s Plan fails to fund services that will help those suffering from homelessness out of homelessness, such as skills training, education or mental health services. So what benefits are there to the prevention of falling back into homelessness? 

The Plan also fails to mention the implication for people residing in the United States illegally. Much programming in the Plan relies on federal funding, such as loan assistance through Freddie Mac. Will those who are not legal citizens be given the same advantages? 

Summary

While the Plan may not be as comprehensive as hoped, it is still one of the most comprehensive affordable housing plans. Fewer new homes were built a decade after the Great Recession than any other decade since the 1960s. So the sharp increase in housing costs has been years in the making. In addition, the Plan targets many of the barriers the housing market faces, such as cost and regulatory boundaries, which often deter contractors from building. 

This Plan will help many find affordable homes when in the past, there were none available. President Biden’s Affordable Housing Plan is a step in the right direction for the fight for the struggle against homelessness. 

Sources:

https://www.rocketmortgage.com/learn/chattel-mortgage

https://www.whitehouse.gov/briefing-room/statements-releases/2022/05/16/president-biden-announces-new-actions-to-ease-the-burden-of-housing-costs/

https://www.hud.gov/program_offices/comm_planning/titlev#:~:text=Title%20V%20of%20the%20McKinney,to%20assist%20persons%20experiencing%20homelessness

https://www.mercurynews.com/2021/09/20/bay-area-cities-join-lofty-biden-plan-to-tackle-homelessness/ 

https://www.youtube.com/watch?v=jzdHQUKYS3Q 

https://www.freddiemac.com/about/faqs 

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