As of Friday’s passing, President Joe Biden’s Build back Better Act has passed the House as well as the Senate. This is a remarkable piece of legislation. He promises to do a lot using a budget only a third of what was originally proposed. However, the bill remains, in terms of pure spending, one the most costly pieces of legislation since years. The bill’s most offensive provision is however related to housing.
The cost of housing is an integral part of the problem that is homelessness. In fact, in a recent poll, respondents from the 20 metro areas that experienced the largest population growth between 2010–2019 listed both the cost of housing and homelessness as their top two concerns, and by almost identical margins (86 and 87 percent, respectively). In the past year, average rent prices have increased by nearly 20%. Since 2001 rents in almost every state have been rising at a faster pace than incomes.
Renting assistance would not lead to an increase in housing supply, and would only make the situation worse. As many as 5,000,000 houses are needed to satisfy the current demand in America.
The Build Back Better Act has allocated $150 billion to housing. More than half goes toward rental assistance programs, which is a dubious use. However, about a third of this amount is used to build or renovate more affordable housing units, increasing the overall supply and potentially lowering costs.
The poll found that urban dwellers are concerned about affordability of housing. However, the majority supported various initiatives to improve it.[e]More affordable housing options are available. Unfortunately, local and state governments, enslaved by the concerns of vocal NIMBYs (shorthand for “not my backyard”), tend to resist any type of development that might address a lack of housing. Zoning is the single most significant regulation disadvantaging poor people.
Build back Better does this. fundThe Unlocking Possibilities Program is a competitive grant program that encourages “streamlining regulatory requirements” and “shortening.”[ing]These are the processes [and]Reform[ing] zoning codes.” Like any grant program, the effectiveness of it will depend on its implementation. However, with $4.26 trillion in funding, there’s plenty of room for potential impact.
Ideal scenarios would have as little zoning restrictions possible. This allows developers to respond to community needs without the need for approval from the government. Public funding is a better option than the current status quo. However, it’s still not an ideal solution.
Biden’s bill is overstuffed, and may have more flaws than it advertises. However, there are some steps to correct this particular problem.