American Housing and Economic Mobility Act of 2021 Introduced

On April 23, 2021, Senator Elizabeth Warren and Congressman Emanuel Cleaver introduced the American Housing & Economic Mobility Act of 2021 (S. 1368 and H.R. 2768. These bills reintroduce bills from the prior Congress, with some additional provisions.

Among the major provisions in the Act:

  • Leverages federal funding to build 3 million new housing units. It is hoped that the increased supply will lower the cost of housing for lower-income and middle class families. An independent analysis by Moody’s Analytics indicates that this level of new production will reduce rents by 10%. This new production will be accomplished by –
    • Investing $445 billion in the Housing Trust Fund to build, rehabilitate, and operate up to 2.1 million homes for low-income families, including in rural areas and in Indian country where housing quality is especially poor.
    • Invest $25 billion in the Capital Magnet Fund, which will be leveraged 10:1 with private capital, to build more than 835,000 new homes for lower-income and middle class families.
    • Invest $4 billion in a new Middle-Class Housing Emergency Fund, which supports construction or acquisition of homes, to be made affordable permanently, for middle-class purchasers and renters where there is a housing shortage and costs are rising faster than incomes.
    • Invest $523 million in rural housing programs to create 380,000 rentals and help 17,000 families buy homes.
    • Invest more than $2.5 billion to build or rehabilitate 200,000 homes for Native Americans and Native Hawaiians.
    • Invest more than $3 billion in the Public Housing Capital Fund to help maintain public housing units.
  • Downpayment assistance to communities that have been historically denied mortgages by the federal government. As late as the 1960s, the federal government was the primary impediment to mortgage subsidies for African-Americans. This was a prime contributor the today’s black/white wealth gap. This bill provides downpayment grants to first-time homeowners living in formerly redlined or officially segregated areas.
  • VA-guaranteed home loan eligibility for descendants of certain veterans. While the GI-Bill provided for VA-guaranteed home loans for veterans, federal discrimination prevented many Black veterans from using this benefit. The bill extends eligibility for VA-guaranteed home loans to direct descendants of veterans who served between the enactment of the GI Bill and the Fair Housing Act but did not receive that benefit.
  • Creation of incentives for local governments to eliminate unnecessary land-use restrictions that drive up costs. The bill puts $10 billion into a new competitive grant program that communities can use to build infrastructure, parks, roads, or schools. To be eligible, local governments must reform land use rules that restrict production of new affordable housing or implement measures to protect tenants from harassment and displacement.
  • Expands the Community Reinvestment Act (CRA) to cover non-bank mortgage companies, promotes investment in activities that help poor and middle-class communities, and strengthens sanctions against institutions that fail to follow the rules.
  • Would amend the Fair Housing Act to prohibit discrimination based on sexual orientation, gender identity, marital status, veteran status, and source of income. It would also make it easier to use housing choice vouchers in neighborhoods with good schools and good jobs and will allow tribal housing authorities to administer their own voucher programs.
  • All housing built or supported with funding from this legislation will have to have 10% (vs. 5%) of units set aside for persons with mobility impairments (Section 504 requirements).

The fate of this bill, along with other housing related bills, is uncertain. We will track the progress and provide regular updates.