Elizabeth Warren Introduces Bill That Spends Half a Trillion Dollars on Housing

BOSTON ― High rents, high sales prices, high mortgage rates, bidding wars, a lack of inventory: symptoms of a nationwide housing crisis that have prompted a Massachusetts senator to reverse his decision. Elizabeth Warren file a bill in Washington that he says could help solve the problem.

The bill, called the American Housing and Economic Mobility Act, aims to create nearly 3 million affordable housing units nationwide, lower costs for working people by 10% and save families $140 a month.

Massachusetts could receive funding to expand its housing stock by 175,000 units.

The plan allocates funds to state and local governments and grassroots and community organizations to address local housing needs by funding creative local approaches and solutions.

Warren acknowledged that Republicans, who currently control the House of Representatives, “are going to be taking us on this.”

Proposal to raise federal inheritance tax

The bill, reintroduced in a previous version, aims to cover additional spending for new homebuilding businesses by increasing the federal estate tax.

Currently, the federal government taxes estates over $13.61 million at a rate of 18% to 40%, depending on how much of the estate exceeds $13.61 million. Several states also impose an inheritance tax; Massachusetts imposes an inheritance tax on estates over $2 million.

Warren’s bill would restore the federal estate tax to its 2009 level, at the end of George W. Bush’s term, when the tax rate was 45% on estates worth more than $3.5 million.

Warren, a Democrat running for re-election in the fall, introduced the bill at Urban Edge in Roxbury, a public housing developer.

Local mayors attended the morning announcement, including the mayors of Fitchburg and Gardner.

The senator said she envisions a partnership between the federal government and state and local governments and organizations. “The landmark legislation would follow up on and counter the failures of federal housing policy” and also mandate that projects pay construction workers enough to afford to live in the homes they build.

“We have to do it,” Warren said. “What we’re doing now is not doing it, we’re falling further and further behind every year.”

She said it was time for the federal government to “step away from the margins” and invest heavily in housing to ensure the working and middle classes have a place to live.

Where will the money go?

• $445 billion for the federal Housing Trust Fund to build, rehabilitate, and operate nearly 2 million homes for low-income families, including those in rural areas. This includes $2.5 billion to rehabilitate or build new homes for Native people in the continental United States and Hawaii.

• $25 billion for the Capital Management Fund to leverage private capital at a 10-to-1 ratio to build more than 750,000 units of housing for lower- and middle-class families.

• $4 billion for a new Middle-Class Housing Emergency Fund to support the construction of homes that are permanently affordable to middle-class buyers and renters in low-asset areas where housing costs are rising faster than incomes.

• $1 billion to support housing construction in rural areas, creating conditions for renting and supporting home purchases.

• $70 billion for the Public Housing Capital Fund to maintain social housing.

Other provisions of the bill

• Assistance for first-time, first-generation homebuyers and guaranteed VA loans for certain veterans and their families as a way to reverse discrimination faced by black veterans who were denied access to loans under the GI Bill. Eligibility would be limited to families and descendants of veterans who served between the passage of the GI Bill and the Fair Housing Act.

• A grant program designed to support residents of depressed communities whose properties have negative equity.

• Incentives for local governments to repeal restrictive land use and zoning regulations.

• Limitations of private capital in the real estate market.

• Lenders’ responsibility to ensure access to credit for all Americans.

• Stronger anti-discrimination laws and more opportunities to get housing vouchers.

• Requires that residential buildings constructed with funds from the act have twice the number of available units than the federal requirement.

This article originally appeared on Telegram & Gazette: Elizabeth Warren’s bill would spend half a trillion dollars on housing