Democratic presidential hopeful Senator Michael Bennet has a very ambitious plan to tackle the country’s affordable housing crisis
The Colorado Senator is calling to eliminate the shortage of 7.2 million affordable homes in the U.S .Bennet does not have an exact cost estimate for the plan, but one person familiar with his campaign said it will be significantly cheaper than what other presidential candidates are proposing. But Yahoo Finance calculated that his plan could cost $863 billion, just shy of the U.S. Social Security Administration’s annual budget. Dispersed over a decade, it could amount to $86.3 billion per year — about 60% more than the U.S. Department of Housing and Urban Development’s (HUD) $52.7 billion 2019 budget (Annualized Continuing Resolution), not to mention other expenses for the department. And a $33.6 billion budget increase seems unlikely, as the 2020 HUD budget proposal came in at $44.1 billion in March — well below HUD’s current budget.
Bennet, who is a ranking member of the Senate’s Subcommittee on Energy, Natural Resources, and Infrastructure as part of his term on the Senate’s Committee on Finance, said under his plan 4 million affordable housing units would be created, preserved or refurbished in the U.S. via government funding.
Assuming all the units are refurbished instead of built from the ground up — new construction would double the cost — this piece of the plan would cost $324 billion, at $81,000 per unit, according to HUD estimates. The person familiar with Bennet’s campaign said that costs is inflated and that the preservation of units costs just a few thousand dollars per unit.
“Michael's plan is a comprehensive approach to both building more affordable homes and helping families access them, and it will be paid for by reexamining tax policies that currently subsidize high-income homeowners at the expense of people living paycheck to paycheck,” a campaign spokesperson said.
Bennet said he would leverage existing federal programs like the Housing Trust Fund that would be backed on the state and municipal level and amount to $400 billion to eliminate the remaining 3.2 million gap. On top of that, he calls for about $40.6 billion in incentives to fund housing innovation ideas like a competitive grant to reduce exclusionary housing, a grant competition for homebuilders to rethink “radically low-cost housing,” Capital Magnet Fund grants and a pilot program to create housing budgets.
Bennet’s plan also calls for $20 billion to revitalize downtown areas over 10 years and an ambitious $7.5 billion per year program to “end all forms of” homelessness by 2028.
"A home is a platform for stability and upward mobility in America, but for too many families, owning a home is out of reach and the high cost of paying rent has pushed them to a breaking point," said Bennet in an emailed statement. "As a former superintendent, I know how important it is for kids to have a stable home so they can show up to school ready to learn and succeed. Slogans like national rent control won’t solve the problem. We need to build more homes near good jobs and good schools and ensure people can actually afford them. That’s the bottom line for creating opportunity for all Americans."
Sarah Paynter is a reporter at Yahoo Finance. Follow her on Twitter @sarahapaynter
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