Elizabeth Warren Introduces Plan to Expand Affordable Housing and Dismantle Racist Zoning Practices

Originally published in The Intercept on September 28, 2018.

This week, Sen. Elizabeth Warren, D-Mass., introduced the American Housing and Economic Mobility Act, one of the most far-reaching federal housing bills in decades. The legislation calls for a half-trillion dollar investment in affordable housing over the next 10 years, creating up to 3.2 million new units for low- and middle-income families.

The bill also expands the protections of decades-old legislation to reduce discriminatory banking, ban housing discrimination, and desegregate neighborhoods. For example, Warren’s bill would make it illegal for landlords to discriminate against renters with federal housing vouchers, and would also impose new regulations on credit unions and nonbank mortgage lenders like Quicken Loans. The bill also incentivizes states and localities to loosen their racist and discriminatory zoning restrictions; eases the path for low-income families to move into more affluent communities; and provides federal assistance to first-time homebuyers from formerly segregated areas and those who saw their wealth decimated in the 2008 financial crisis.

Warren’s bill comes on the heels of two other federal housing bills introduced this summer by Democratic Sens. Cory Booker and Kamala Harris, of New Jersey and California, respectively. Harris’s bill, which came first, aims to provide financial relief to renters by creating a new refundable tax credit. Booker’s bill would also establish a refundable tax credit for renters and incentivize communities to curb their exclusionary zoning rules to increase housing supply. Booker, Harris, and Warren are all names frequently thrown around as 2020 presidential hopefuls, though none has actually announced their intent to run.

“Much of the housing discussion has been about affordability, production, and tenant protections, which are all really important issues,” said Philip Tegeler, the executive director of the Poverty and Race Research Action Council. “What’s so powerful about Warren’s bill is that it aims to tackle all those things, and it also looks at how are we going to structure our society going forward. Fair housing is really embedded in the legislation, and that’s why I find it so creative.”

To incentivize states and communities to ease their zoning restrictions and boost affordable housing supply, a Warren aide told The Intercept, the senator’s staff looked at the Race to the Top program, the Obama administration’s signature education initiative. In Race to the Top, the federal government doled out $4 billion in competitive grants to states that adopted the administration’s preferred education reform policies, like lifting caps on charter schools and overhauling teacher evaluations. The program was massively effective: Forty-six states and Washington, D.C., revamped their policies to compete for the federal funds.

Warren’s bill takes that same competitive grant model, and allows states, metropolitan regions, and cities to compete for $10 billion in federal funds. (Race to the Top had two rounds of competitive funding; Warren’s bill proposes five.) To compete, jurisdictions must first reform their zoning restrictions and reduce other barriers to affordable housing production. Grant winners can then use the federal dollars to fund all sorts of projects, such as building parks and schools and improving local transit.

Often when new, dense housing developments are proposed, residents raise concerns about the overcrowding of schools or increased traffic congestion. Warren’s bill would arm political leaders with added resources to help make those housing tradeoffs a bit easier. Yes, increasing housing supply could lead to an increase in the public school student population, but reforming land use policies could also help cities access additional federal dollars to absorb those new residents more smoothly.

To fund the bill, Warren proposes a return to Bush-era estate tax levels, and increasing those taxes on the country’s 10,000 wealthiest families. The Massachusetts senator cited an independent study conducted by the chief economist at Moody’s Analytics, an economics research firm, which determined that Warren’s bill was “fiscally responsible” and would “go a long way toward addressing” the affordable housing crisis. Moody’s projects the bill would lower rents by 10 percent and make it easier for low- and middle-income workers to live closer to their jobs, thereby reducing “long and costly commutes.”

POLITICIANS, INCLUDING PROMINENT progressives like Warren, have historically steered away from efforts to curtail exclusionary zoning, said Rick Kahlenberg, a senior fellow at the Century Foundation, a liberal think tank. The difference now, he told The Intercept, is that “rents have become too damn high,” so elected officials, including presidential hopefuls, are more open to ideas that previously seemed too controversial to embrace.

Henry Kraemer, a Portland-based activist, co-authored an article in The Nation in May making the political case for Democrats to take up housing issues. In August, he followed up with a co-authored report laying out specific policy recommendations, such as new rent subsidies and expanded public housing. Kraemer and his report co-author, Laura Loe Bernstein, note that successfully enacting all their proposals would be “nearly or entirely impossible” without ending “apartment bans” — another name for exclusionary zoning. “Apartment bans restrict new home-building to the sort of single-family houses most commonly associated with suburbs and affluent neighborhoods,” they write. “Apartment bans are extraordinarily widespread, and render it illegal to build duplexes, triplexes, fourplexes, and other spaces where multiple families can live nestled together (and often more cheaply) on the same plot of land.”

Kraemer told The Intercept it’s “fantastic” to see 2020 hopefuls “putting out bold solutions to the housing crisis” that Democrats can pursue if they reclaim Congress and the White House. In the short term, Kraemer said, the Harris, Booker, and Warren bills “send the right signals” to state and local lawmakers.

“Maybe more than any other politician, Elizabeth Warren helped set the tone and agenda for the party’s economic work around the country,” Kraemer said. “To see her saying now that these historic inequities in housing and soaring rents and mortgages are huge problems — well, that’s a big, big deal.”

The Trump administration has also recently signaled its intent to address zoning rules, at least rhetorically. In August, Housing and Urban Development Secretary Ben Carson came out to say that he, too, wants to use federal funds to loosen zoning restrictions. “I want to encourage the development of mixed-income multifamily dwellings all over the place,” he told the Wall Street Journal.

But progressives have voiced rightful skepticism of Carson’s newfound enthusiasm for zoning reform, as he’s also been leading the push to weaken civil rights protections from his federal perch. For the past year, HUD has been trying to weaken the Affirmatively Furthering Fair Housing rule, which was finalized in 2015 and designed to bolster fair housing enforcement. In August, the agency announced that over the next two months it would be opening the rule back up for public comment, claiming that “the current regulations are ineffective” and provide jurisdictions with “inadequate autonomy in developing fair housing goals.”

Carson went further in a statement, claiming that the Affirmatively Furthering Fair Housing rule is “suffocating investment” in distressed neighborhoods and contributing to the lack of affordable housing.

“When Ben Carson talks about zoning, he’s not really talking about exclusionary zoning. He’s talking about fair housing rules that prevent the piling on of all the low-income housing in poor neighborhoods,” said Tegeler, whose primary concern with Warren’s bill is that it lacks language to prevent the hundreds of millions of dollars in federal housing funds from pouring exclusively into poor areas.

“It’s very important that this continues to be a fair housing bill and not play into the Trump administration’s framing,” Tegeler said. “As this bill is further refined, we’d hope to see some protections against piling on the bulk of this new development in high-poverty, segregated neighborhoods.”

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