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Sen. Warren Introduces $470B Bill To Fix Affordable Housing Crisis

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Sen. Elizabeth Warren has proposed one of the most sweeping pieces of legislation to address affordable housing in generations.

On Wednesday, Warren introduced the American Housing and Economic Mobility Act, which aims to "help bring down costs for renters and buyers and level the playing field so working families everywhere can find a decent place to live at a decent price," her office wrote in a summary of the bill.

Sen. Warren Introduces $470B Bill To Fix Affordable Housing Crisis
Sen. Elizabeth Warren speaking at the Democratic National Convention in 2016

If signed into law, the bill would earmark $445B for investment into the Housing Trust Fund, which Warren estimates would pay for 2,100,000 affordable homes to be built, maintained and managed across the U.S. An additional $25B would go into the Capital Magnet Fund, which combines with private capital to build homes and communities in underserved areas, with the CMF's contributions capped at 10% of any project.

Smaller sums would be dedicated to funding housing for middle-class families, rural communities and on indigenous people's land. The $470B in funds would be generated by a proposed rollback of cuts to the estate tax that were enacted in 2009. An additional progressive tax on the 10,000 wealthiest households in the country would generate the remaining needed revenue.

Warren's office commissioned Moody's Analytics to review the proposal, and the company came back with a firm endorsement, estimating that an average of 300,000 affordable homes would be built every year over the 10-year budget horizon set forth from the bill. 

"It is fiscally responsible legislation that empowers programs that are already in place and shown to be effective in meeting the challenges of providing affordable housing to low- and middle-income households and underserved communities," Moody's Chief Economist Mark Zandi wrote in the report.

The bill also targets the discriminatory practices in lending and renting, adding enforcement power to the mechanisms created by the Community Reinvestment Act. The CRA was enacted in 1977 to ensure that financial institutions provide access to credit for low-income families. The bill would give down payment subsidies to first-time homeowners in communities that were hit with discriminatory zoning and lending policies in the past.

Warren also addresses discriminatory practices that have not yet been outlawed at the federal level, extending federal protection against housing discrimination "on the basis of sexual orientation, gender identity, marital status and source of income."

As further incentive to encourage cities and towns to allow more affordable housing, the bill would set up a $10B grant program that would fund the building and repair of infrastructure, roads, schools and parks. Only municipalities that ease zoning laws restricting affordable housing construction would qualify for grants.

The full text of the Affordable Housing and Economic Mobility Act can be found here.