The Atlantic, September 25: Elizabeth Warren’s ambitious fix for America’s housing crisis
On Tuesday, Senator Elizabeth Warren (D-MA) introduced a bill tackling the issue head on, trying to lower the cost of a home in a neighborhood with greater economic opportunity. The legislation, titled The American Housing and Economic Mobility Act, is perhaps the most far-reaching assault on housing segregation since the 1968 Fair Housing Act. It’s ambitious, pouring half a trillion dollars over 10 years into affordable housing programs, funded by raising the estate tax to Bush-era levels. The sheer scale of the bill, along with its focus on structural racism and government responsibility, places Warren’s brand of populist progressivism on full display.
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.
The bill also focuses on the ways housing inequality falls along racial lines. 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 to become first-time home buyers.
The bill also 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.
Jesse Van Tol, CEO of the National Community Reinvestment Coalition, believes the bill’s reform of the CRA is essential. He told me banks need to be held accountable when they loan to low-income communities and communities of color.
Whether the bill can gain momentum in Congress remains to be seen, relying in large part on the outcome of the midterm elections in about six weeks. The bill is a signal by Warren to her base that she isn’t sitting on the sidelines. As Zillow’s Casey said, “It isn’t trying to nibble around the edges.”
