Dems Propose American Housing and Economic Mobility Act
Presidential Candidate and United States Senator Elizabeth Warren (D-Mass.) introduces the American Housing and Economic Mobility Act [AHEMA] intended to build or rehabilitate more than 3 million units over the next decade and fully close the current gap between housing demand and supply, create 1.5 million new jobs at its peak impact, bring down rents for lower-income and middle-class families by 10% – saving families an average of $100 per month – and produce no long-term deficit impact.
At least these are the goals of the legislation. Jaded voters are raising eyebrows as to whether these are attainable goals or political posturing, but let’s break down the bill on the merits. You can decide whether it’s worth your support.
AHEMA attacks two housing issues; the first is not enough homes, the other is homes with too little value. Sounds like farmers and city slickers can get behind both. The bill also includes a provision to use federal funds to help bridge the wealth gap between black and white families. “Whaaaa? There is a wealth gap between black and white families,” asked Sarcastic Sid. “Yes, there is,” said Rey Hollingsworth Falu and every demographic study in the country.
The bill creates a new fund within the U.S. Department of Housing and Urban Development aka HUD, to give down-payment assistance to first-time homebuyers in communities that were once subject to redlining. To be eligible an individual would need to be a first-time buyer, a resident of the area for four years, and earning no more than 120 percent of the area median income. The bill never mentions race, but the goals would clearly impact generations of Blacks who has suffered housing discrimination. The fund falls short of a policy to level the effects of all housing discrimination and neglects other aspects of the racial wealth gap, but it is a start.
The bill assigns $2 billion to borrowers who owe more on their mortgages than their homes are worth, communities hit by foreclosures. It generates $445 billion for the Housing Trust Fund in order to construct and rehabilitate 2.1 million homes. It increases HUD funds for tribal grants and rural housing programs. All this spending would be paid for by dialing back exemptions to the estate tax; an analysis by Moody’s Analytics finds that Warren’s bill would be deficit neutral.
2020 is an election year so let the policy battles begin! If you need more analysis of the AHEMA…AskHollingsworth.
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