President Biden Announces New Plans to Address Racial Wealth Disparities
The Biden Administration announced this week new steps to help narrow the racial wealth gap and reinvest in communities that have been left behind by failed policies. Specifically, the Biden Administration is expanding access to two key wealth-creators – homeownership and small business ownership – in communities of color and disadvantaged communities. To address racial discrimination in the housing market, the Biden Administration is launching a first-of-its-kind interagency effort to address inequity in home appraisals, and conducting rulemaking to aggressively combat housing discrimination. Additionally, President Biden’s plan includes using the federal government’s purchasing power to grow federal contracting with small disadvantaged businesses by 50 percent, translating to an additional $100 billion over five years, and helping more Americans realize their entrepreneurial dreams.
President Biden has asked HUD Secretary Marcia Fudge to lead the interagency initiative to address inequity in home appraisals. The effort will seek to utilize the many levers at the federal government’s disposal, including potential enforcement under fair housing laws, regulatory action, and development of standards and guidance in close partnership with industry and state and local governments, to root out discrimination in the appraisal and home buying process.
The White House also released new information regarding President Biden’s American Jobs Plan proposals to increase access to affordable housing and build wealth in communities of color, including:
Create a Community Revitalization Fund to Support Community-Led Civic Infrastructure. The American Jobs Plan calls for a new $10 billion Community Revitalization Fund based at the Department of Housing and Urban Development to support community-led civic infrastructure projects in urban, suburban, and rural areas that create innovative shared amenities, spark new local economic activity, provide services, build community wealth, and strengthen social cohesion. The Fund would be targeted to economically underdeveloped and underserved communities, including those, like Greenwood, that suffer from the effects of persistent poverty, historic economic disinvestment, and ongoing displacement of longtime residents.
Incentivize Ending Exclusionary Zoning and Expanding Housing Choices. In the American Jobs Plan, President Biden is calling on Congress to enact the Unlocking Possibilities Program, an innovative, new $5 billion competitive grant program that awards flexible and attractive funding to jurisdictions that take concrete steps to eliminate needless barriers to producing affordable housing and expand housing choices for people with low or moderate incomes.
The fund has several key features to support locally-led efforts to advance zoning reforms:
- Grant program for community engagement, technical assistance and analysis that will help communities identify the most powerful levers to produce more affordable housing;
- Investment and incentives to implement land-use and zoning policies that remove needless barriers to needed housing; and
- Extensive evaluation and development agenda to identify the policy changes that most effectively encourage affordable housing production.
Communities that qualify for implementation and investment awards will have access to flexible funding that help support public services in neighborhoods where new affordable housing is being developed and that benefit all community members. The goal of these efforts will be to increase the production of affordable housing, expanding access to good jobs and powering inclusive economic growth.
Enact a New Neighborhood Homes Tax Credit. The American Jobs Plan calls for a new Neighborhood Homes Tax Credit to attract private investment in the development and rehabilitation of affordable homes for low- and moderate-income homebuyers and homeowners. These tax credits will increase homeownership opportunities and asset-building for underserved communities, reduce blight and vacant properties, and create thousands of good-paying jobs. The Neighborhood Homes Tax Credit will:
- Encourage investment in homes that cost more to redevelop than they can sell for on the open market. Approximately 40 percent of U.S. housing stock is at least 50 years old and more than 15 million properties are vacant even as families struggle to find affordable housing. In many neighborhoods, these properties make it difficult to attract or retain local homebuyers, reducing property values and community wealth. Modeled after the Low-Income Housing Tax Credit and the New Markets Tax Credit, state housing finance agencies would receive an annual allocation of Neighborhood Homes Tax Credits based on population. Each state’s housing finance agency would then award tax credits to project sponsors—developers, lenders, or local governments—through a competitive application process. Sponsors would use the credits to raise investment capital for their projects, and the investors could claim the credits against their federal income tax when the homes are sold and occupied by eligible homebuyers. These tax credits would cover the difference between total development costs (including acquisition, rehabilitation, demolition, and construction) and the sales price. This would, for example, make it financially viable to spend $120,000 acquiring and rehabilitating a vacant property that would only sell for $100,000 on the open market by offering a $20,000 tax credit to cover the difference.
To view the White House’s Fact Sheet on President Biden’s actions to build black wealth and narrow the racial wealth gap, click here.
Senator Rubio Reintroduces Housing Accountability Act
Senator Marco Rubio (R-FL) recently reintroduced S. 987, the Housing Accountability Act (HAA). The legislation would seek to hold property owners of low-income housing accountable for poor living conditions. Specifically, the legislation would require residents of private properties that have Section 8 Housing Assistance Payment (HAP) contracts to be surveyed twice a year in order to determine the existence of persistent problems with a property’s physical condition or management.
The HAA would codify sanitation standards and would require the Performance-Based Contract Administrator of properties receiving Housing Assistance Payments from HUD to administer a semi-annual survey that allows tenants to report problems at their property. The Secretary of HUD would have the ability to refer properties for remediation or fine owners of neglected Section 8 properties based on the surveys and PBCA observation. The revenues generated from the fines may only be used to improve the conditions at the property or finance tenant relocation. Lastly, the HAA requires HUD to submit a report to Congress detailing the capital reserves for Section 8 properties and how these funds are used for purposes other than maintenance and property improvement. S.987 has been referred to the Senate Committee on Banking, Housing, and Urban Affairs for further consideration. A companion bill is expected to be introduced in the House of Representative by Representative Steve Cohen (D-TN).
To view the full text of the Housing Accountability Act, click here.