House Passes $1.7 Trillion Build Back Better Act
On Nov. 19, the U.S. House of Representatives passed the Build Back Better Act. The passed 220-213 and is now in the Senate for consideration. In a recent letter, Senate Majority Leader Charles Schumer told lawmakers to prepare for a busy remainder of the year. He has set a Christmas deadline for passing the Build Back Better Act. The timing is significant, since the proposal extends a key aid program, the expanded monthly child tax credit, that’s set to expire at the end of the year.
Democrats are planning to use a procedure called reconciliation so that they can approve the bill in the Senate with just 50 votes, which would alleviate the need for support from Republicans. With the reconciliation process, Senate Democrats must ensure every element of their tax-and-spending proposal directly implicates the federal budget or else it is at risk of being stripped out of the measure entirely.
Allocations for Affordable Housing
The House-passed $1.7 trillion bill includes major investments in affordable housing. The legislation would funnel $25 billion into the construction, rehabilitation, or purchase of affordable homes for low-income people and for the creation and preservation of affordable rental housing. It would provide $65 billion to address the capital needs backlog of public housing and would bolster rental assistance to hundreds of thousands of families. In addition, the measure would also invest in down payment assistance and in community-led redevelopment projects in under-resourced neighborhoods. And it would provide $24 billion to fund housing vouchers and supportive services. According to the Congressional Budget Office, the affordable housing measures would cost about $148.1 billion.
Specifically, for HUD affordable housing programs, the Build Back Better Act includes:
- $65 billion to revitalize public housing;
- $25 billion for new Housing Choice Vouchers;
- $1.45 billion, instead of the original bill’s $4 billion, for the preservation and improvement of HUD multifamily housing. This includes the Section 8 Project-Based Rental Assistance, Section 202, and Section 811 portfolios;
- $1.77 billion, instead of the original bill’s $6 billion, for energy and water efficiency and climate resiliency improvements to the Section 8 Project-Based Rental Assistance, Section 202, and Section 811 portfolios;
- $501 million, instead of the original bill’s $2.36 billion, for the Section 202 Supportive Housing for the Elderly program;
- $880 million, instead of the original bill’s $15 billion, for new Section 8 Project-Based Rental Assistance;
- $15 billion for the national Housing Trust Fund. The HTF has never received a federal funding allocation; it has been funded exclusively from Fannie Mae and Freddie Mac, which transfer a percentage of their new business volume into the HTF each year.
- $10 billion for the HOME program; and
- $750 million for the Housing Investment Fund, a redesigned Capital Magnet Fund. This program is within the Community Development Financial Institution fund at the Department of the Treasury. The Housing Investment Fund will provide grants to invest in the development, preservation, rehabilitation, financing, or purchase of affordable housing for renters and homeowners within 120 percent of the area median income. The funds can also be used for rental housing operations.