Elizabeth Warren’s Ambitious Fix for America’s Housing Crisis

Elizabeth Warren’s Ambitious Fix for America’s Housing Crisis, Madeleine Carlisle, The Atlantic, Sept. 25, 2018, available here

First, a quick summary of the bill. It aims to lower the cost of developing housing so landlords don’t have to make rents so high, coming at the issue from two different angles. From one end, it tries to increase the supply of affordable housing by pouring billions of federal dollars into programs that subsidize developments in rural, low-income, and middle-income communities.

From the other end, the bill attempts to strip away the zoning laws that made developing housing so expensive in the first place. Many of these zoning laws limit low-income residents from moving to wealthier neighborhoods. In Tegeler’s opinion, the laws are one of the main drivers of housing unaffordability. Those laws typically exist at a local level, so in order to target them, Warren’s bill creates a competitive block-grant program. The grant money could be spent flexibly—on schools or parks, for example—and is intended to appeal to suburban communities with stricter zoning laws. Those communities can only access grants if they reexamine and redress their land restrictions.

The bill also focuses on the ways housing inequality falls along racial lines. Notably, it assists populations that federal housing policy has historically failed: formerly segregated African American populations and families whose housing wealth was destroyed in the financial crisis. Under the bill, black families long denied mortgages by the federal government qualify for down-payment assistance, helping many in formerly segregated communities become first-time home buyers. The bill also invests $2 billion to support borrowers still recovering from the financial crisis with negative equity on their mortgages.

Additionally, the bill restructures the Community Reinvestment Act (CRA), a 1977 law proposed to monitor banks with discriminatory loan policies against communities of color. Warren’s bill gives the CRA more enforcement mechanisms and expands its policing power to include credit unions and nonbank mortgage companies, which were not as ubiquitous when the bill was passed. Lastly, the bill strengthens antidiscrimination laws by expanding Fair Housing Act protections to include gender identity, sexual orientation, marital status, and source of income, attempting to limit housing segregation in the future.

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