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How Biden’s $1.9T stimulus plan impacts housing

Initiatives include a forbearance and eviction extension, plus billions in rental assistance

President-elect Joe Biden’s $1.9 trillion stimulus, unveiled Thursday as the American Rescue Plan, includes a call for extending the national moratorium on evictions and foreclosures until Sept. 30, while also setting aside funds to provide legal assistance to households facing foreclosure or eviction.

Biden is also calling for an additional $30 billion in funding for emergency rental, energy and water assistance for hard-hit households, plus $5 billion in emergency assistance to people experiencing or at risk of homelessness.

In its most recent economic research report, Goldman Sachs officials said they expect a pared-down version of the plan – checking in at an estimated $750 billion to $1.1 trillion –  to be passed between mid-February and mid-March. They also expect a second proposal dealing with taxes, infrastructure, and benefit programs to pass around mid-year.

Non-housing specifics of Biden’s plan include sending out-of-work Americans an extra $400-per-week federal bonus on top of whatever jobless benefits they receive from their states. He is also asking for $15 billion in grants and nearly $200 billion in investments and low-interest loans to help small businesses.

The percentage of Americans experiencing housing insecurity has risen to 9.5% – up from 7.2% two months ago. But Biden’s administration is hoping that an influx of cash from the new plan could alleviate the pinch many homeowners and renters may be feeling.


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As part of his plan, Biden is calling for an additional $1,400 payment to each household – on top of the $600 that was sent out earlier this month – in the form of a direct deposit, an expansion of jobless benefits, and a $15 minimum wage proposal. The latter would likely lead to higher construction costs.

These initiatives could be passed via the budget reconciliation process, which means Democrats can pass them through the Senate without needing Republican votes. However, Biden said he hopes to have the stimulus package passed on a bipartisan basis.

“The consensus among leading economists is we simply cannot afford not to do what I’m proposing,” Biden said Thursday in a speech from his home state of Delaware. “Independent, respected institutions from around the world, from the Federal Reserve to the International Monetary Fund, have underscored the urgency. Even Wall Street firms have reinforced the logic.”

Paul Ashworth, an economist at Capital Economics, warned that enacting reconciliation for the American Rescue Plan could impact any future plans Biden wants to pass in 2021.

“Reconciliation comes with additional constraints, would take longer to pass, and can only be used once each fiscal year,” he said. “With Biden seemingly eyeing another fiscal package after this one, which would focus on longer-term priorities that might partly be funded via tax increases, he might not want to waste a reconciliation on this near-term stimulus.”

Housing advocates have warned that prior stimulus packages would not be enough to prevent a nationwide housing crisis, and the threat of mass evictions would also pose a serious health threat as the country continues to grapple with the COVID-19 pandemic.

Biden’s plan does include an expansion of vaccines and virus-test programs – as well as more cash at the state and local levels – but the possibility of millions losing their homes could overwhelm the current offensive against the virus.

Several industry officials commented on Biden’s stimulus plan, with most claiming it would be especially beneficial to low-income and minority home owners.

David Dworkin, president of the National Housing Conference, said major investment in housing construction is vital to jumpstarting the economy, as well as injecting cash into the “mom-and-pop landlords,” many of whom who have gone nearly a year without rental payments.

“As our nation faces an economic crisis, the focus should be on putting Americans back to work,” Dworkin said. “Furthermore, an effective stimulus and vaccination rollout will help prevent the need for additional rental assistance. As industry leaders have expressed, the first $25 billion was a significant down payment towards the rental crisis, but research has proven an additional $25 billion is certainly needed.”

The point was echoed by Sunia Zaterman, executive director of the Council of Large Public Housing Authorities, who noted that 11.4 million renters have accrued an average of $6,000 in back rent to date – totaling $70 billion in unpaid rent.

“The CLPHA is committed to working with Congress and the Biden-Harris administration to ensure [the financial plan’s] swift passage so that Americans facing the threat of eviction don’t have to wait another day longer,” she said.

Zaterman referenced the Housing Choice Voucher, mentioned in Biden’s plan as an avenue of delivering rental assistance immediately.

“Its efficiency is proven, the infrastructure is in place, and it can rapidly expand to deliver the significant amount of relief proposed in the American Rescue Plan,” Zaterman said.

Housing improvements were a key component of Biden’s election campaign, with the former vice president saying prior to the election that he would introduce a tax credit for first-time homebuyers upwards of $15,000, reintroduce sharper regulatory teeth to agencies such as the Consumer Financial Protection Bureau, alter a spate of restrictive zoning laws to increase development, build millions of units of affordable housing, and cap payments for certain renters.

In all, he pledged to inject more than $600 billion into improved housing.

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