Biden's $1.75T Build Back Better (BBB) Act will *not* solve the Housing Crisis.
Here's why: ⬇️⬇️⬇️
Here's why: ⬇️⬇️⬇️
The House of Representatives passed Build Back Better last week. It will now head to the Senate for a vote.
Build Back Better allocates $1.75T to clean energy, child care, housing and health care.
Build Back Better allocates $1.75T to clean energy, child care, housing and health care.
What is the Housing Crisis?
Right now, there simple aren't enough homes available for sale in the US housing market. This supply shortage prices out a lot of homebuyers.
Do the housing provisions in Build Back Better address this issue?
Right now, there simple aren't enough homes available for sale in the US housing market. This supply shortage prices out a lot of homebuyers.
Do the housing provisions in Build Back Better address this issue?
Build Back Better allocates $150B to housing programs.
Most of this outlay targets programs for renters.
Let's look at some of the major programs.
Most of this outlay targets programs for renters.
Let's look at some of the major programs.
Section 40001 provides grants to repair, replace and construct rental properties.
However, given huge backlogs, most of these funds will be used for repairs and renovations.
There is very little scope for new home construction.
However, given huge backlogs, most of these funds will be used for repairs and renovations.
There is very little scope for new home construction.
Sections 40009 and 40010 allocate $25 B for rental assistance.
This will improve affordability, and drive up demand for rental units.
But if the supply of rental units stays the same, this improvement in affordability may be nullified by runaway rent increases.
This will improve affordability, and drive up demand for rental units.
But if the supply of rental units stays the same, this improvement in affordability may be nullified by runaway rent increases.
Section 40002 provides grants for improving the housing supply.
According to our calculations, the funds allotted to this program can add up to 250K housing units.
However, according to experts, the current inventory shortage is much larger - between 3.8-5.5 million units!
According to our calculations, the funds allotted to this program can add up to 250K housing units.
However, according to experts, the current inventory shortage is much larger - between 3.8-5.5 million units!
Section 40201 allocates $10 B for down payment assistance to first-generation homeowners.
However, the maximum assistance provided under this program is $20,000 - considerably lower than the median down-payment of $27,850.
However, the maximum assistance provided under this program is $20,000 - considerably lower than the median down-payment of $27,850.
The housing programs in the Build Back Better package are a good start in increasing housing accessibility for ordinary Americans.
But Biden will have to do a lot more if he wants to solve the Housing Crisis!
But Biden will have to do a lot more if he wants to solve the Housing Crisis!
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