A new policy proposed by the Biden administration’s Department of Energy would pay billions of dollars in consumer rebates in order to foot the bill of the administration’s electrification push.
This scheme, currently in development, echoes a prominent theme in the Biden administration’s governance: economic mitigation efforts that draw heavily on taxpayers’ wallets.
A recently released fact sheet details an ambitious plan for housing cost reduction and affordable homeownership expansion. This plan represents a considerable investment into housing, totaling over $175 billion in both mandatory and discretionary allocations.
President Biden’s approach to combat the affordable housing crisis involves several strategies. These include constructing and maintaining affordable homes for both rental and ownership and reducing restrictive housing production practices. The plan also aims to establish long-term commitments to housing affordability for vulnerable groups, such as youth transitioning out of foster care and veterans.
First-time, first-generation homebuyers — a demographic often denied the wealth-building potential of homeownership — stand to gain from provided down payment assistance. The administration is also eager to continue and expand upon its unprecedented eviction prevention, diversion and rent relief programs. A significant goal tied to these efforts is a proposed 25% reduction in homelessness by 2025.
The Biden administration’s strategy proposes substantial investments that promise to lower costs for renters and homebuyers alike. The intended results — a more robust and resilient economy and an advancement of fair housing principles — are central to the president’s economic agenda.
The funding scheme for this endeavor draws its resources from the taxpayers themselves. The budget proposes a new Neighborhood Homes Tax Credit, at a cost of $16 billion over 10 years. This credit aims to bridge the gap between the construction costs and sale price for rehabilitated or newly constructed single-family homes in low-income communities. The credit hinges on the condition that these homes are occupied by low- or middle-income homeowners.
Moreover, the budget proposes to expand the Low-Income Housing Tax Credit (LIHTC) — a substantial federal incentive for affordable housing construction and rehabilitation — investing $28 billion to increase the housing supply for low-income renters.
To assist the country’s 11 million extremely low-income renter households, the budget includes $7.5 billion in funding for new Project-Based Rental Assistance contracts. These contracts, in tandem with other low-income housing programs and incentives, aim to attract development capital for the creation of new affordable homes.
Additionally, a $10 billion allotment aims to incentivize state and local jurisdictions to expand supply and increase housing choice by reducing barriers to affordable housing development. This funding supports efforts to identify and eliminate obstacles such as restrictive zoning and burdensome permitting processes.
Although the administration’s housing initiatives present potential solutions to the affordable housing crisis, critics argue that the rising costs Americans face are the direct result of the administration’s policies. The irony is not lost on these critics that the proposed solution involves reimbursing citizens with their own tax dollars to counteract the administration’s actions.
The ripple effects of this new initiative — whether it alleviates or exacerbates the affordability crisis — will be unveiled with time. However, this development signifies yet another instance of the Biden administration’s approach: mitigating economic challenges using taxpayer dollars — a practice some perceive as simply returning Americans their own money.
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