Biden’s infrastructure plan includes $213 billion for affordable housing

President Biden recently unveiled his infrastructure proposal, asking Congress to approve $2 trillion in spending.

And while much of that proposal involves basic repairs to roads and bridges, as well as upgrades to the electrical grid and expanding access to broadband internet, the plan calls for a whopping $213 billion to create more affordable housing.

Adding to the housing stock is a priority of the Biden administration, and the plan would build or rehabilitate more than 500,000 dwellings for low- and middle-income homebuyers, as well as retrofit more than two million commercial buildings and affordable housing units, to create more affordability in the marketplace.

Specifically, Biden is asking Congress to approve the Neighborhood Homes Investment Act – legislation that would provide an additional $20 billion in tax credits for affordable housing through 2026.

There are other incentives tied to affordable housing, such as creating a grant program for local jurisdictions that eliminate red tape that slows or prevents new housing development, like exclusionary zoning laws.

The big debate that will certainly take place in Congress is where this vast amount of funding will come from.

President Biden’s plan is to raise taxes on large and multinational corporations to offset the cost of his infrastructure goals.  His Made in America Tax Plan would raise the corporate tax rate to 28% from the 21% rate that was put in place as part of former President Trump’s Tax Cuts and Jobs Act of 2017. The top corporate tax rate was 35% prior to 2017.  The plan also provides an increase in taxes for the earnings American companies make outside of the U.S.

The Department of Transportation is certainly linked to this latest proposal as well, as prior to the unveiling of the plan it announced it was seeking applicants for the 2021 Infrastructure for Rebuilding America grant program, which provides $889 million to fund national and regional transportation projects.

This is important to the affordable housing piece of the plan as the department will consider whether a development project is in a federally designated community development zone or opportunity zone. If so, improvements in transportation in those areas could pique the interest of real estate developers to also take advantage of those opportunity zone incentives to build affordable housing close to new transportation hubs, or at least areas that have easy access to new transportation.