Biden's Budget Proposal Strives to Deal with Low Housing Supply

March 31st, 2022  / Author: Zachariah Peterson
News

President Joe Biden released the budget proposal for the year 2023 and requested a historically high amount of money for the Housing and Urbanism Department. The budget submission states that $71.9 billion should be spent in the fight against the housing crisis, which is 34% higher than last year. The underlying reason for the proposal is to put an end to homelessness and to protect the underprivileged.

This budget is set to achieve an improvement in the housing market as a whole, focusing on affordable housing and closing the gap between demand and supply. The National Association of Realtors published a report last year that showed a housing shortage of around 6 million residential units across the States.

Congress will decide whether $35 billion will go towards the Housing Supply Fund, a new government program created to ensure grants for local and state housing agencies. Adequate strategies would be funded with the goal of creating more supply, which would be at arm’s length for median and low earning households.

Biden’s budget also addresses the very low-income households by setting aside $32.1 billion for the Housing Choice Voucher Program, the biggest increase ever. This program is protecting the undeserving communities by prioritizing the victims of domestic and sexual violence, human trafficking survivors, as well as families that have experienced homelessness. This amount of money is enough for all vouchers to be renewed and for an additional 200,000 new vouchers.

Going forward, the Housing and Urbanism Department will deal with homelessness with $3.58 billion for the Homeless Assistance Grants. This federal funding will strive to deal with homelessness prevention, but also create and maintain emergency shelters and rapid re-housing.

HOME Investment Partnership Program is HUD’s largest fund that addresses affordable housing and the budget assigns it $2 billion. HOME has multiple subprograms dedicated to different communities, and $100 million is set aside as downpayment assistance for first-time buyers. The budget also offers help with wealth collecting for lower-income families, by providing $15 million in grants for first-generation home buyers.

The ecological aspect of housing is also addressed in the proposal, as there are resources set aside for areas prone to natural disasters. $1.1 billion is dedicated to energy efficiency and climate resilience in public housing, as well as $250 million for communities to create local plans for environmentally sustainable neighborhoods.

Lower-income renters are addressed substantially in the budget proposal. The Public Housing Program, which is creating affordable rental units for low-income families, could be given $8.8 billion. There are approximately 1.3 million public housing units in the US and the Public Housing Fund is there to both help maintain existing and create new housing. Project-Based Rental Assistance could get $15 billion for the renewal of existing contracts, which is on a level with last year's budget.

Biden requests $5.8 trillion in total and his proposal addresses domestic and global issues. Housing and gun safety initiatives have been the focus domestically, while the $100 billion investment in the military addresses the global peace crisis. The proposal was released on Monday and now it moves to Congress.

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