Biden wants more housing units as Hill Democrats urge rental aid

Both approaches would add billions to federal spending — and both would fall short of solving problem

House Financial Services Chairwoman Maxine Waters has a bill that would do more than any other to expand housing supply and vouchers, but its $600 billion price tag is well above what most lawmakers are discussing. (Tom Williams/CQ Roll Call file photo)
House Financial Services Chairwoman Maxine Waters has a bill that would do more than any other to expand housing supply and vouchers, but its $600 billion price tag is well above what most lawmakers are discussing. (Tom Williams/CQ Roll Call file photo)
Posted July 29, 2021 at 7:02am

As lawmakers work their way through infrastructure proposals and appropriations bills, Democrats are confronted with a gap between President Joe Biden and members of Congress over how to address what both see as a big shortage of affordable housing.

The lines between the two aren’t always clear, but the president is broadly using the infrastructure effort to try to increase the number of housing units available while Democrats on Capitol Hill focus on getting vouchers to enable people to pay the rent.

The roles are somewhat reversed on appropriations bills, but at lower amounts. Biden’s budget requested a boost to rental voucher spending, seeking more than House Democrats are poised to provide in a fiscal 2022 spending bill. 

But the administration’s and lawmakers’ approaches have two things in common: Both would add billions of dollars to federal spending on housing, and both would fall short of solving the problem. The National Low Income Housing Coalition estimates that the U.S. needs another 7 million rental homes to meet the needs of low-income families. The Urban Institute, a Washington-based think tank, says 8.2 million households are eligible for vouchers and aren’t receiving them. 

Housing and Urban Development Secretary Marcia L. Fudge said at a House Financial Services Committee hearing this month that the administration knows its proposal falls short of meeting the full extent of housing needs, but it’s a start. 

“As a nation, we have not at any time in recent history for decades invested in public housing or new moderate- and low-income housing. We just have not done it. And so, time has finally caught up with us,” Fudge said. “If we do not take this opportunity to invest in housing, as we have not done in generations, we will never be able to catch up.”

She called Biden’s proposal “the most significant piece of housing legislation in my lifetime.”

House Financial Services Chairwoman Maxine Waters has a bill that would do more than any other to expand housing supply and vouchers, but its $600 billion price tag is well above what most lawmakers are discussing, even with a $3.5 trillion reconciliation bill in play to carry some infrastructure spending.

Biden is trying to address the housing shortage by expanding the supply. His infrastructure proposal in March, which he labeled the “American Jobs Plan” to emphasize the employment rationale, would spend $213 billion over eight years to build or rehabilitate at least 2 million units, most of them rentals. 

As wide as the gap is between the supply and the need for affordable housing, the federal government still has to spend billions just to keep things at the current level. The National Low Income Housing Coalition in 2019 estimated 10,000 public housing apartments are lost to disrepair every year. 

Biden’s infrastructure proposal would provide $40 billion to address a backlog of repairs in public housing. The coalition put the backlog of repairs at about $70 billion.

Neither of Biden’s two infrastructure proposals would subsidize rent for low-income families.

HUD Secretary Marcia L. Fudge has called President Joe Biden’s proposal “the most significant piece of housing legislation in my lifetime.” (Tom Williams/CQ Roll Call)

Meanwhile, Democrats in Congress have insisted that any infrastructure package passed through reconciliation must include rental subsidies to bring down costs for the lowest-income families.

“When the subject of affordable housing is brought up, the question that often comes to mind is affordable for whom,” Rep. Ritchie Torres, D-N.Y., said at the Financial Services hearing. “If we expand housing supply without expanding housing subsidy, then we run the risk of creating housing that’s unaffordable to the lowest-income Americans.”

Torres organized a group of 106 House Democrats in a call to include rental vouchers in an infrastructure package, according to a draft letter to House leadership provided to CQ Roll Call.

Section 8 housing vouchers are the government’s main program for subsidizing housing costs. The vouchers accounted for $25 billion of the Department of Housing and Urban Development’s enacted fiscal 2021 budget, just over half of the $49.7 billion in the department’s discretionary spending. The Center on Budget and Policy Priorities said households wait an average of 2.5 years to secure a voucher.

The vouchers can cover up to 70 percent of rent for families that make half the local median income or less. Three-quarters of subsidies must go to households making a third of the median or less. The estimated 8.2 million voucher-eligible households that go without aid far outnumber the 2.3 million that get them.

Senate proposals

Senate Banking Chairman Sherrod Brown, D-Ohio, said the Democrats’ $3.5 trillion reconciliation bill for infrastructure would include “major dollars” for housing, including public housing, rental vouchers, down payment assistance for buyers and lead paint removal. But the details are still unclear. 

“I always want to do more, but ... the topline numbers we see look really good,” Brown said in an interview without disclosing the exact figure.

Once Senate leadership agrees on a total amount for housing, Brown’s committee would be tasked to decide how to spend it. He said,  also without naming an amount, that public housing repair and rental vouchers are likely to get the biggest allocations.

Sen. Chris Van Hollen, D-Md., a member of the Banking Committee, said he’s trying to get funds in the bill to create 500,000 of what he calls “mobility” vouchers over five years. His proposal is part of a bill co-sponsored by Sen. Todd Young, R-Ind. Mobility vouchers would have support services attached with the goal of moving families to neighborhoods with better opportunities, including education or jobs.

“We think we’re well-positioned,” Van Hollen said. 

The House

Torres and other Democrats, including 17 other House Financial Services members, have urged Speaker Nancy Pelosi and Minority Leader Kevin McCarthy to include a “major housing voucher expansion” in an infrastructure package, saying it would pave the way for full coverage of eligible households.

In their letter to Pelosi and McCarthy, the lawmakers didn’t put a price on their rental subsidies. They did ask for $70 billion to repair public housing and $45 billion for the National Housing Trust Fund, a HUD program that sends block grants to states, primarily to provide and maintain rental housing.  

Waters has the most financially ambitious proposal. She would spend $600 billion over an unspecified time, nearly three times the amount Biden has in his initial infrastructure proposal. 

Waters’ bill would also address housing on every front: $150 billion for rental subsidies, $75 billion for public housing repairs, $45 billion for the Housing Trust Fund and $35 billion for the HOME Investment Partnership Program, a separate HUD initiative. 

A separate bill in Waters’ package would offer 500,000 new vouchers in fiscal 2022 and 1 million each year through fiscal 2025, and then make rental vouchers an entitlement.

Appropriations

The fiscal 2022 appropriations work — the House began floor action on a package of seven bills on Tuesday — has greater emphasis on vouchers from both the administration and lawmakers. Biden’s fiscal 2022 budget request in May asked for 200,000 new vouchers.

The House Transportation-HUD spending bill instead would provide $1 billion for 125,000 new vouchers. Combined with the rising cost of renewing existing vouchers, that would increase total spending on Section 8 tenant-based rental vouchers to $29.2 billion for 2022.

The House bill would give modest increases to HUD programs that support the construction of new affordable homes, especially spending targeting vulnerable groups: $8.64 billion to support public housing, with $3.4 billion set aside for repairs; $1 billion to build about 2,200 affordable homes for the elderly; $352 million to build about 1,800 units for people with disabilities; and $1.85 billion for the HOME Investment Partnership Program.

Brian Schatz, D-Hawaii, chairman of the Senate Transportation-HUD Appropriations Subcommittee, said he’s working with committee Republicans to create more vouchers in the Senate’s fiscal 2022 spending bill. He didn’t say how many more. 

Schatz said Congress also has to appropriate money to help HUD recover from an 18.5 percent decline in staff members from 2008 to 2017, a drop that a 2019 inspector general’s report said exceeded that of any other department. Schatz said HUD hasn’t distributed 70,000 to 80,000 available vouchers. 

“It’s very fun for politicians to say, ‘Not a penny goes to administrative expenses,’” Schatz said. “But when you’re pushing out housing vouchers, someone has to actually do the work.”