Here’s Where U.S. President-Elect Joe Biden Stands on Key Housing Issues

While some votes are still left to be tallied, it’s looking increasingly likely that former vice president Joe Biden and U.S. Senator Kamala Harris will be the next president and vice president of the United States. Biden will have the difficult task of uniting a divided nation that’s also struggling in the battle against the COVID-19 pandemic.

The pandemic’s economic blow has impacted millions of Americans, with economic activity pulling back sharply earlier this year and seeing only a partial rebound. As positive cases continue to climb in many states, it’s possible that some of that partial rebound will be undone by the time Biden is sworn in on Jan. 20.

Despite economic turbulence throughout 2020, the housing market has been the exception, with record-low mortgage interest rates and low inventory levels have created a boom in home sales. The desire to avoid housing density, pent-up buying demand and the sudden switch to remote work for many have driven prospective buyers into the housing market.

Although housing wasn’t a hot topic on the campaign trail, Biden’s policies have the potential to affect the housing market. Here’s a closer look at some of Biden’s positions on housing and mortgage finance issues.

Biden’s proposed housing policies

Here are some of Biden’s key housing proposals (Note: Many of these initiatives can be found in more detail in this memo):

Invest in and execute a detailed $640 billion housing plan 

• “Joe Biden will invest $640 billion over 10 years so every American has access to housing that is affordable, stable, safe and healthy, accessible, energy efficient and resilient, and located near good schools and with a reasonable commute to their jobs,” according to a campaign statement.

Create a new advanceable tax credit of up to $15,000 to increase homeownership

• Affording the down payment is an obstacle to homeownership for many Americans. This is particularly true for groups who have not been historically able to build equity due to prior and ongoing discrimination.
• Biden’s tax credit would assist cash-strapped buyers afford a home. Homebuyers would get the tax credit when they purchase a home (before filing their taxes the next year) instead of paying out of pocket, then getting refunded at tax time.
• Additionally, public and national service workers, such as teachers and first responders, may be eligible for down payment help and discounted prices on homes.

Establish a new Homeowner and Renter Bill of Rights

• Address high-cost loans, which are disproportionately taken out by Black homebuyers.
• “Prevent mortgage servicers from advancing a foreclosure when the homeowner is in the process of receiving a loan modification.”
• “Give homeowners a private right of action to seek financial redress from mortgage lenders and servicers that violate these protections.”

Create a national standard for home appraisals to fight racial housing wealth gap

• Ensure that properties in communities of color wouldn’t be assessed at lower values than similar homes in comparable white neighborhoods.
• “Biden will establish a national standard for housing appraisals that ensures appraisers have adequate training and a full appreciation for neighborhoods and do not hold implicit biases because of a lack of community understanding.”

Create a public credit reporting agency

• Working with the Consumer Financial Protection Bureau (CFPB), Biden wants to establish a new federal credit reporting agency to reduce racial gaps in credit scoring.
• Biden’s proposal seeks to minimize racial credit reporting disparities by using algorithms that won’t focus on discriminatory factors and include alternative credit information, such as rent payment histories and on-time utility bill payments.

Fully fund Section 8 vouchers

• The Section 8 program helps low-income renters afford private market apartments and ensures they do not spend more than 40% of their income on rent.
• Every low-income American who qualifies for the program would receive assistance under Biden’s plan.
• Currently, only a quarter of households eligible for vouchers receive them due to a shortage in supply as a result of budget caps on the program.

Increase accountability for discriminatory practices in the housing market

• Specifically, Biden wants to hold financial institutions accountable when they practice predatory and discriminatory lending.

Strengthen and expand the Community Reinvestment Act

• Plans to expand the act to apply to non-bank mortgage lenders and insurance companies.
• Biden also wants to “add a requirement for financial services institutions to provide a statement outlining their commitment to the public interest, and to close loopholes that would allow these institutions to avoid lending and investing in all of the communities they serve.”

Roll back Trump administration policies gutting fair lending and fair housing protections for homeowners

• Reinstate the Affirmatively Furthering Fair Housing regulation, which was eliminated by the Trump administration.
• Biden also wants to bring back the federal risk-sharing program, which helped obtain financing for thousands of affordable rental homes by partnering with local housing agencies.

Invest in a $100 billion affordable housing fund to develop affordable housing

• The fund would add $65 billion in new incentives for state housing authorities and the Indian Housing Block Grant program to build or renovate affordable housing in areas with low supply of such homes.
• Allocate $10 billion to make homes more energy efficient, and another $5 billion to build new, affordable housing.

“Enact legislation requiring any state receiving federal dollars through the Community Development Block Grants or Surface Transportation Block Grants to develop a strategy for inclusionary zoning”

• Inclusionary zoning, which allows for higher-density construction, has emerged in recent years as a strategy for increasing the stock of housing with the goal of making it more affordable.
• Single-family zoning policies have their roots in discriminatory practices early in the last century, and this plan would help “eliminate local and state housing regulations that perpetuate discrimination.”
• “Biden will also invest $300 million in Local Housing Policy Grants to give states and localities the technical assistance and planning support they need to eliminate exclusionary zoning policies and other local regulations that contribute to sprawl.”

Expand the Low-Income Housing Tax Credit (LIHTC)

• The LIHTC has added more than 3 million housing units since it was created in 1987 by incentivizing the construction or rehabilitation of affordable housing.
• The tax credit has an annual budget of $8 billion, which Biden would expand to $10 billion.

Ensure rural communities have access to affordable homes

• The U.S. Department of Agriculture’s (USDA) Rural Housing Service funds various programs in rural areas for both multifamily and single-family homes.
• Biden plans to expand these programs, which guarantee USDA loans under favorable underwriting and repayment terms, and low rates in communities with less than 35,000 residents.

Work to end homelessness

• To make housing a right for all Americans, Biden plans to invest at least $13 billion over a five-year period, in conjunction with passage of the Ending Homelessness Act.
• The plan would be paired with comprehensive mental health and addiction assistance for the homeless, and job training programs to help with workforce integration.
• The plan also aims to reduce homelessness amongst veterans.
• For formerly incarcerated individuals, the plan would create housing options so they all have housing when released and increase more access to public assistance programs for them.

How Biden’s policies might fare in a divided Congress

Biden’s plans are largely designed to help those who face barriers and discrimination in accessing affordable housing. Broadly, his plans aim to address historical inequities in housing finance and development in the United States.

While these plans are detailed and, if implemented, would have a significant impact on the housing market, it’s unclear how much of his agenda Biden will actually be able to accomplish with the control of the Senate still in limbo.

If the Senate remains under Republican control, then Biden’s proposals that would require congressional approval — tax credits, the creation of a credit reporting agency or the allocation of new money for housing programs — may be stalled due to partisan gridlock.

Still, Biden could accomplish some changes by issuing executive orders. Although these orders would have more limited scope than congressional action, they could compel federal agencies like the U.S. Department of Housing and Urban Development (HUD) or the USDA to adopt policies consistent with Biden’s vision.