What the $2 Trillion American Jobs Plan Could Mean for Housing
President Biden introduced The American Jobs Plan this week—the Administration’s $2 trillion infrastructure and jobs plan that aims to support our nation’s physical infrastructure, clean energy investment, broadband equity and job creation. Importantly, the proposal calls for a $213 billion investment in housing-specific provisions.
NAA and NMHC have long-argued that any large-scale infrastructure package should drive new investment in housing, promote transit-oriented and high-density development and fund community-level infrastructure needs. President Biden’s plan for historic infrastructure investment is a welcome first step to achieving this goal and we look forward to working with Congress and the Administration as they develop the specific provisions that will be included in the final package. For example, lawmakers have introduced a number of industry-supported bills that are in line with the goals outlined in the President’s infrastructure package and we will continue to advocate for these provisions to be included in the final infrastructure bill.
Alongside The American Jobs Plan, the President released a package of tax proposals that would raise $2 trillion over the next 15 years by increasing the corporate tax rate from 21 percent to 28 percent. In addition to engaging on the specifics of the infrastructure package, NAA and NMHC will work with lawmakers to advocate for beneficial tax incentives that support our shared goals of promoting housing affordability—while also defending against the prospect of tax increases that could negatively impact the industry. You can read more about the specifics of Biden’s The Made in American Tax Plan here.
While this infrastructure plan does not currently include any changes to individual tax rates, the President plans to unveil the remaining parts of his "Build Back Better" agenda in the coming weeks, which will be called the American Families Plan. This proposal will purportedly focus on “tax evasion among corporations and high-income Americans” and include provisions to help families, such as a child tax credit and paid leave.
With Republicans vowing to oppose any increase in the corporate tax rate, and progressive Democrats seeking a larger package, it is unclear what the path forward is for final passage of the President’s infrastructure plan.
To learn more about what the current infrastructure proposal could mean for the industry, look below to explore how specific provisions align with multifamily industry priorities.
The Plan: The proposal calls to produce, preserve and retrofit more than a million affordable housing units through “targeted tax credits, formula funding, grants, and project-based rental assistance.”
NAA/NMHC Viewpoint: We strongly believe that public-private partnership is paramount to creating and preserving affordable rental housing. Specifically, we believe that it is crucial to not only invest in rehabilitating existing communities but also promote improvements in affordable housing and stimulate new affordable development through density bonuses, fast-track review and by-right development.
Zoning and Land Use
The Plan: To support the creation of more equitable communities, Biden is calling for an end to harmful exclusionary zoning and land use policies. He is urging Congress to eliminate minimum lot size provisions, mandatory parking requirements and prohibitions on multifamily housing, which “have inflated housing and construction costs and locked families out of areas with more opportunities.” To accomplish these goals, the Administration is proposing a new, competitive grant program that would award funding to jurisdictions “that take concrete steps to eliminate such needless barriers to producing affordable housing.”
NAA/NMHC Viewpoint: Exclusionary zoning policies are misguided, discriminatory policies that further promote segregated, inequitable communities. And, in doing so, only exacerbates our nation’s worsening housing affordability crisis. In addition, overly burdensome regulations—like the examples provided in Biden’s proposal—account for an average of 32.1 percent of multifamily development costs. We are in agreeance with this portion of Biden’s proposal and have long-advocated that policymakers must ease regulatory barriers to apartment construction and provide the resources necessary to update zoning laws, eliminate counterproductive land use restrictions, right-size parking requirements and streamline permitting. In order to support affordable, equitable communities it is critical that lawmakers break down regulatory barriers and leverage federal funding.
The Plan: The Administration’s proposal is urging Congress to invest $40 billion to improve the public housing system infrastructure. Specifically, the funding would “address critical life-safety concerns, mitigate imminent hazards to residents, and undertake energy efficiency measures which will significantly reduce ongoing operating expenses.”
NAA/NMHC Viewpoint: Public housing is in need of funding to address the backlog in maintenance and repairs necessary to preserve the viability of this affordable housing stock. Last Congress, NAA and NMHC supported the Housing is Infrastructure bill introduced by Chairwoman Maxine Waters (D-CA), which we believe furthered that goal. Specifically, the bill included $100 billion in capital funds to address the backlog in maintenance, improve infrastructure and address the ongoing operating expenses for the public housing stock.
Clean Energy and Sustainability Investment
The Plan: The American Jobs Plan aims to address issues related to climate across the board—including energy and sustainability provisions in nearly every aspect of the proposal. But, housing-specific provisions include upgrading homes through “block grant programs”, the Weatherization Assistance Program and the expansion of home and commercial efficiency tax credits. The Administration is also calling on Congress to establish a $27 billion Clean Energy and Sustainability Accelerator “to mobilize private investment into distributed energy resources; retrofits of residential, commercial and municipal buildings; and clean transportation.”
NAA/NMHC Viewpoint: NAA and NMHC support proposals that improve the resiliency of our communities through clean water, clean energy and clean air. Programs that encourage public and private investment in activities that benefit the places we live are essential to creating the communities that we all want to live in.
The Plan: The Administration has vowed to “bring affordable, reliable, high-speed broadband to every American,” with a particular interest in bridging the digital divide in rural America.
NAA/NMHC Viewpoint: Broadband equity has been a key industry priority for several years and the pandemic has only exacerbated the need for further investment in this space. NAA and NMHC strongly believe that policymakers should bolster broadband infrastructure and enhance access for all residents.
Transportation, Community Infrastructure and Transit-Oriented Development
The Plan: The President’s proposal takes a sweeping approach to investing in our nation’s physical infrastructure— including the modernization of 20,000 miles of highways, roads and main-streets, fixing over 10,000 brides and expanding public transit systems. The plan would also upgrade and modernize America’s drinking water, wastewater and stormwater systems. Importantly, the President is calling for a modernization of public transit, and asks Congress to invest $85 billion to “help agencies expand their systems to meet rider demand,” which would double public transit federal funding.
NAA/NMH Viewpoint: New and existing housing relies on dependable infrastructure. The President’s plan would reverse years of underinvestment that has led communities to finance infrastructure needs by passing along costs to property developers, builders and owners. In addition, as the Biden Administration moves to make unprecedented investment in infrastructure and transportation systems, we encourage them to support multi-modal transportation options and encourage transit-oriented, high-density and infill development. Specifically, the Administration should look to industry-supported legislation that promotes transit-oriented development—such as the Better Planning and Land-Use for Accessible Neighborhoods (PLAN) Act and Build More Housing Near Transit Act.
Provided by NMHC as part of the NAA/NMHC Joint Legislative Program