Budget proposal from the White House includes more than $175B for affordable housing

Triggered by the pandemic, housing prices in cities and counties across the United States have skyrocketed. Between the fourth quarters of 2021 and 2022, house prices rose 8.4 percent, according to data from the Federal Housing Finance Agency. The latest budget proposal from the White House seeks to curb those rising costs and provide low-income residents with a path to homeownership through a more than $175 billion investment.

“A lack of quality affordable housing hinders the job market and holds back economic growth by making it harder for workers to access good-paying jobs,” reads a brief from the White House explaining the proposed investment. “It drives up costs for families and inflationary pressures. It also increases commutes and inefficient energy consumption, which exacerbates climate change.”

To that end, the budget invests in preserving and building affordable houses, both for rent and ownership. It also reduces barriers to building new homes—like restrictive land use policies and “practices that foster discrimination and disparate treatment in the housing market,” the brief says.

The allotments also invests in first-generation homeowners, and commits to housing accessibility and affordability for populations vulnerable to homelessness including youth aging out of foster care and veterans. 

Especially in rural communities, it’s long been a problem for aging and longtime residents to find affordable housing that suits their needs. Among other things, the proposed budget increases funding for the U.S. Department of Agriculture’s multifamily housing programs by $283 million, and another $258 million to build 2,200 new affordable units for elderly people and those with disabilities. It also increases investment into the HOME Investment Partnerships Program by $300 million, and allocates $10 billion for planning and housing capital grants “to incentivize State and local jurisdictions to expand supply and increase housing choice by reducing barriers to the development of affordable housing.”

Besides monetary investment, the initiative calls on Congress to create a new tax credit program that would directly support building or renovating affordable homes for home ownership.

“At a cost of $16 billion over ten years, the credit would cover the gap between the cost of construction and the sale price for rehabilitated or newly constructed single-family homes in low-income communities, encouraging investment in homes that would otherwise be too costly or difficult to develop or rehabilitate—and spurring investment and economic activity in communities that have long suffered from disinvestment,” the brief says.

Broadly, the budget was crafted to target “critical issues that matter to families—increasing the supply of affordable housing, lower rental costs, and making it easier to buy a home—all of which will generate economic growth and prosperity,” said President Joe Biden in a statement about the budget proposal. The middle class came to be through homeownership, he continued, “Because you build equity in that home.  And after 2 years, 5 years, 10 years, you may have $10-, $20-, $30,000 in equity.  You can borrow against it to send a kid to school.  You can borrow against it to do a lot of things.”