In mid-December 2021, Senator Joe Manchin (D-WV) publicly announced that he would not support the House-approved Build Back Better framework in its current form. In doing so, he suggested that his Democratic colleagues in Congress and the White House were not taking his concerns at face value. Manchin has largely avoided publicly listing his specific policy objections to the bill, but it appears his reluctance stems from several concerns:
- Adding to the size of the federal debt
- The use of budget ‘gimmicks’ to obscure the true cost of programs
- Exacerbating high rates of inflation with additional stimulus
- Lack of means-testing to ensure programs go to those in need
- Failure to reach bipartisan consensus
In recent days, Manchin has indicated a willingness to reopen negotiations, but noted that he would be starting from scratch rather than working from the bill that passed the House in November. After months spent negotiating without a breakthrough, Democrats face the urgent task of crafting legislation that can secure Manchin’s vote and generate a transformative investment in the lives of Americans.
In order to ameliorate Manchin’s concern about the deficit, the price tag—given the available offsets–appears to be $1.75 trillion. Given this topline number and the concerns raised above, what should be included in such a bill? According to reports, Manchin included hundreds of billions for climate-related programs, full 10-year funding for universal Pre-K, and an extension of the Affordable Care Act expansion in a counter-proposal to the White House in December.
Opportunity Starts at Home, as a multi-sector campaign spanning many industries, strongly supports the inclusion of these important investments. We also believe that their ultimate impact will depend heavily on the inclusion of another investment: funding for affordable housing. On this issue, the evidence is clear: the benefits of healthy development, educational opportunity and quality healthcare—along with countless other priorities—are fundamentally undermined by housing insecurity and homelessness. In the words of Diane Yentel and Nan Roman, “A home is the foundation upon which all the other priorities rest.”
For many in the United States, that foundation is crumbling or non-existent. Nearly 600,000 individuals are homeless on a given night, including roughly 225,000 living without shelter. Less visibly, over ten million Americans face severe rent burdens–spending more than half of their income on housing–and there is a shortage of 7 million homes accessible to extremely low-income renters. In Senator Manchin’s home state of West Virginia, 32% of renters are extremely low income, and two-thirds of these households face severe rent burdens. Beyond the basic household budget impact, high housing costs for low-income families mean less money for crucial investments in nutrition, healthcare, and education.
The policy solutions to this crisis are relatively straightforward–investment is needed in construction and repair of affordable housing units alongside an expansion of rental subsidies–but federal funding has not kept up with the scope of the challenge. For example, the number of public housing units has been declining since the mid-1990s and even available units are in dramatic need of repair. Furthermore, even as the number of Housing Choice Vouchers (HCV) has increased over time, demand has dramatically outstripped supply, with only one in four eligible households receiving a voucher.
The Case for Housing in Any Reconciliation Legislation
Even beyond the urgent need to address the affordable housing crisis, there is a strong case for prioritizing major housing investments in a revamped reconciliation bill for two additional reasons. First, these investments satisfy each of Senator Manchin’s concerns, clearing an important hurdle to securing the passage of Biden’s signature bill. Second, because of the foundational importance of housing to Americans’ lives, incorporating housing investments in BBB is an extremely efficient way to fulfill progressive priorities and complement other high-impact investments.
The housing investments included in the version of BBB that passed the house cost a total of $166 billion. Of these, three of the largest investments–totaling $105B–are particularly noteworthy:
- $65B for public housing improvements, repairs, and construction. More than two million people live in public housing in the United States, but properties face immense repair backlogs. Funding from the bill would address critical issues including rodent infestations, mold, and leaking pipes.
- $25B for rental assistance via an expansion of the HCV program. This funding would create 300,000 new vouchers, benefiting over 700,000 people including an estimated 274,000 children. The expansion specifically targets households with low-incomes, along with specific subgroups, such as victims of domestic violence and those at risk of homelessness. It also provides mobility services to ensure families with young children can use their vouchers to access ‘high-opportunity,’ low poverty neighborhoods.
- $15B for the construction and rehabilitation of affordable housing via the Housing Trust Fund (HTF). HTF funds are allocated as a block grant to states for the acquisition, new construction, reconstruction, and/or rehabilitation of housing for extremely low-income households, with a minimum affordability period of 30 years. It is estimated that this funding would create or preserve up to 150,000 homes .
Not coincidentally, these three investments also headline Opportunity Starts at Home’s policy agenda, Within Reach–precisely because they represent transformative investments in housing stability and quality for households with the lowest incomes. Furthermore, their impact reverberates across policy domains, improving the quality of life in these households on a number of dimensions.
Housing Investments Satisfy Manchin’s Specific Concerns
The good news is that the major housing investments included in Build Back Better satisfy all of Senator Manchin’s concerns. Here’s how:
- These housing investments represent 5-10 year investments, rather than temporary programs that will need to be continually extended. Manchin has stated explicitly that he would not vote for short-term programs that would have to be extended, referring to them as “shell games” and “budget gimmicks.” Instead, Manchin apparently prefers fewer, longer term programs. Fortunately, the major housing investments outlined above met this criteria without employing any unconventional accounting techniques. For example, the bulk of the Public Housing funding lasts until 2026, with some aspects (such as a capital fund) paid for through 2031. The HCV expansion is funded through 2029—a full eight years—and the HTF investments would be funded until 2026. Furthermore, the benefits arising from construction and rehabilitation of affordable housing will last long after the last funds are used, an important distinction from programs with ongoing funding needs.
- Investments in affordable housing improve household budget sheets without exacerbating inflation. Manchin has repeatedly warned that additional spending could further overheat an economy experiencing high rates of inflation. It is worth noting that experts indicate that the entire BBB bill passed by the house is unlikely to increase inflation, because rising prices are thought to be caused by high rates of spending on durable goods (as opposed to services) and supply chain issues, rather than social spending. Beyond this broader point, housing investments specifically should appeal to Manchin’s interest in reducing prices for consumers. Research indicates that increasing the supply of housing (via public housing investments or HTF construction and rehabilitation) moderates price increases, thereby making housing more affordable (Been et al, 2019). Importantly, even the demand-side HCV rental subsidies will lower costs for low-income households without raising prices for others; research suggests that increasing the supply of housing vouchers does not raise the overall cost of housing within a metropolitan area (Eriksen and Ross, 2015).
- Federal housing investments are heavily means-tested, delivering assistance to those truly in need. To the frustration of many democrats seeking to create a larger group of beneficiaries (and therefore, supporters) for new social spending programs, Manchin is staunchly in favor of means-testing, thereby ensuring resources only go to those who need them the most. While this insistence undermines certain social spending initiatives, all major federal housing assistance programs are means-tested, including public housing, Housing Choice Vouchers, and Housing Trust Fund investments. Public housing residents must have income less than 80% of the area median income (AMI), and at least 40% of new admissions in any year must have extremely low incomes (less than 30% of AMI or less than the federal poverty level). HCV recipients’ income may not exceed 50% of AMI and 75% of vouchers are allocated to those below 30% of AMI. Similarly, HTF beneficiaries must be either extremely low income (below 30% AMI) or very low-income (between 30% and 50% of AMI). Collectively, these stipulations would ensure that federal dollars spent on these housing programs will end up directly benefiting those most in need.
- Investments in affordable housing enjoy bipartisan support with politicians and the general public. Manchin proudly displays a page dedicated to his bipartisanship on his congressional website and has repeatedly decried the lack of willingness to compromise on both sides of the aisle. Yet while performative republican opposition to Biden’s signature bill is unlikely to break down over the finer points of housing policy, affordable housing is an area with a great deal of bipartisan activity. For example, Republican Senators Todd Young (IN), Kevin Cramer (SD), John Kennedy (LA), Mike Braun (IN), Rob Portman (OH), and Tim Scott (SC) have all co-sponsored affordable housing legislation in 2021. Nor is this support limited to elected officials. A national poll, conducted by the Tarrance Group—a respected, conservative pollster—found that vast, bipartisan majorities supported federal action on affordable housing issues. For example, a majority of republicans expressed support for expanding investments in affordable housing development (65%), expanding funding for rental assistance (55%), and critical infrastructure repairs to public housing units (56%). Indeed, an overwhelming 79% of Republicans said that it was important to them personally that their elected officials work to make sure there is enough affordable housing available.
Housing Investments Achieve Many Progressive Priorities
These housing investments should not be viewed as mere brick and mortar improvements; rather, because of the profound impact of housing on other aspects of individuals’ lives, investments in housing–especially those that benefit households with low incomes–represent transformative investments across a number of progressive policy priorities. In fact, the housing investments complement many of the other priorities that were included in the version of BBB that passed the house.
Reducing the cost of housing increases low-income households’ financial resources, thereby lowering poverty rates. The HCV expansion in BBB would reach an estimated 700,000 people (including 274,000 children), lowering their households’ housing costs to 30% of income and serving as a form of cash transfer. Similarly, the construction of new public and otherwise affordable housing would result in lower housing costs for millions of families, both directly (low-income households moving into affordable units) and indirectly (by increasing housing supply). With over 7.5 million extremely low-income renters spending more than half of their incomes on housing, reducing the cost of housing this a hugely impactful anti-poverty lever.
Child Development and Education
Stable housing allows for healthy development in early childhood. The first five years of life are a critical stage in child development, especially for the development of noncognitive capacities such as executive functioning. Research suggests that repeated moves during the first five years of life are linked to higher levels of attention problems and behavioral difficulties for children in low-income families specifically (Ziol-Guest & McKenna, 2014). For older children, research suggests that repeated moves throughout childhood are associated with mental health and developmental issues including depression and risk-taking behavior (Anderson et al, 2014).
Reducing housing instability—and enhancing residential mobility—improve educational outcomes. Investments in public housing, affordable housing construction, and Housing Choice Vouchers would dramatically reduce housing instability for children in households with low incomes. There is a strong research base linking housing challenges with reduced educational attainment, with impacts such as higher rates of absenteeism and transfers, lower test scores, and higher dropout rates. (Galvez & Luna, 2014). Furthermore, expanding Housing Choice Vouchers, especially the designated investments in mobility services, would allow low-income households to move to lower poverty neighborhoods; such moves have been shown to increase access to high-quality schools (Deluca et al, 2016).
Reducing the cost of housing increases postsecondary students’ resources for other expenses—such as food and books–and improves their mental health, thereby increasing the odds of degree completion. Because they have not completed schooling and have yet to start their professional careers, students pursuing postsecondary credentials are particularly vulnerable to housing challenges (Broton & Goldrick-Rab, 2013). HCV expansion and affordable housing construction (via public housing and HTF) will reduce financial insecurity for recipients who are pursuing postsecondary credentials. Furthermore, stable housing ensures young adults arrive at postsecondary institutions ready to learn, without the added stressors associated with housing insecurity or homelessness.
Investments in public and affordable housing reflect a much-needed investment in low-income communities after decades of disinvestment. The federal government has a long history of actively contributing to segregation and disinvestment in urban communities. This includes the racist legacy of redlining, urban renewal (at the expense of integrated and predominantly Black communities), and, more recently, a lack of funding for public housing and many other civic institutions in predominantly low-income, Black and brown communities.
Residential mobility allows for greater levels of school integration, which reduces resource disparities and makes educational attainment more equitable. In a national analysis of school desegregation programs from the 1970s and 1980s, economist Rucker Johnson found substantial benefits for Black students, including higher college quality and adult earnings, lower rates of incarceration, and better health (Johnson, 2011). Similarly important benefits have been shown in more recent studies of economic integration (Schwartz, 2010).
Repairing unsafe housing conditions and otherwise addressing safety hazards improves a variety of important health outcomes. Public housing repair is a crucial part of the housing components of BBB, as urgent structural repairs have been put off for decades as the result of underfunding. Why are these repairs so important? Substandard housing conditions, such as exposure to environmental toxins, hazards, and crowding are linked to poor physical health including asthma, lead poisoning, injuries, and other health problems (Sandel and Zotter, 2000H). These health impacts also have follow-on effects such as lower academic outcomes and social emotional problems (Leventhal & Newman, 2010).
Housing stability and residential mobility improve mental–and physical–health. Having access to a stable, affordable home reduces a major stressor for parents. Indeed, parents who face financial housing pressures have higher rates of mental illness and other related outcomes such as insufficient sleep (Stahre et al, 2015). Similarly, research suggests that parents who receive housing assistance have better psychological health than those who are eligible but have not received assistance (Fenelon et al, 2017). Similarly, adults who move into low-poverty neighborhoods (a goal of the HCV mobility funding) also have higher rates of well-being and life satisfaction (Ludwig et al, 2009). Furthermore, financial pressures and frequent moves are linked to outcomes including lower probability of being in good health, hospitalizations, developmental delays, and being underweight (Sandel et al 2018, Cutts et al 2015).
Technological advancements will allow for housing construction, modification and rehabilitation to reduce carbon emissions and pollution. Many different aspects of the affordable housing construction and repair process feature climate upgrades such as solar panels and energy efficiency improvements, including the investments in public housing. The bill also contains separate climate-specific funding for housing.
Residential mobility reduces carbon emissions and pollution. The HCV expansion (including mobility services) will enhance climate-friendly mobility. If families cannot live in neighborhoods that have resources (such as schools) they prefer, they will often live elsewhere and make repeated trips. This is often what occurs when school choice enables options beyond neighborhood schools. Such systems have been shown to increase travel distance, greenhouse gas emissions and exposure to pollution (Wilson et al, 2007).