New Transportation and Infrastructure Bill Includes Important Housing Provisions

June 26, 2020 | Mike Kingsella and Melissa Winkler
Reading time: 5 minutes min

Earlier this week, the House Democrats released text for H.R. 2, the Moving Forward Act, a $1.5 trillion infrastructure and transportation plan. The sweeping legislation provides funding for transportation, including highways, bridges, and transit, as well as money for widespread infrastructure improvements and provisions for financing and tax credits to support community development, revitalization, and rehabilitation. The bill’s infrastructure investments include funding for schools and childcare facilities improvement, increased broadband access, clean energy and the environment, drinking water and wastewater facilities, and the Postal Service.

Importantly, the Moving Forward Act contains a robust housing and land-use policy package that includes investments into housing as infrastructure, expansion of the Low-Income Housing Tax Credit (LIHTC), and creation of a Neighborhood Investment Credit that would subsidize rehabilitation of vacant homes and new construction on vacant properties. The legislation advances many pro-housing policies, and Up for Growth is happy to see much of the legislation we have worked on included in the package.

The extensive housing measures included in the Moving Forward Act signal important recognition of the housing crisis and an emphasis on pro-housing policies. As millions of Americans struggle to pay their rent each month and to find homes in the communities that are close to jobs and resources, we are glad to see Congress take meaningful steps forward to make housing more available and affordable.   

Up for Growth Action has been working extensively on H.R. 4307, the Build More Housing Near Transit Act. Key provisions from the bill have been included in the Moving Forward Act, which would provide bonuses to transit agencies who conduct housing feasibility assessments as part of their grant applications. This provision will incentivize localities to do the critical work of ensuring housing gets built near transit systems. Housing and transit are inextricably linked and ensuring that families and individuals can access affordable housing in high-opportunity, transit-served areas is key to addressing the housing crisis. We are excited to see this improvement to the transit funding process included in H.R. 2.

At least three of Up for Growth’s policy priorities have been included in the housing portion of the bill.

One of Up for Growth Action’s priorities, H.R. 5187, the Housing is Infrastructure Act, has been included in the legislation. Up for Growth Action worked closely with Chairwoman Waters on one provision in particular, Sec. 60013, Community Development Block Grant Funding for Affordable Housing and Infrastructure, which provides incentive funding for states, units of general local government, and Indian tribes who demonstrate they are responsibly streamlining the process for development of qualified affordable housing and who reduce or eliminate impact fees. This streamlining is critical for ensuring that housing gets built effectively and efficiently. Communities will be incentivized to meet pro-housing policy goals, and this improved policymaking will help better connect housing with transit. 

A second key housing provision is the creation of the Neighborhood Homes Credit, which comes from Up for Growth Action supported H.R. 3316, the Neighborhood Homes Investment Act. This credit would incentivize rehabilitation of vacant homes and construction of homes on vacant lots in economically distressed areas. The credit would help close the “appraisal gap” – the difference between rehabilitation costs and the home’s value – which will spur community revitalization and improve existing housing stock to help renters and owners access affordable homes. The credit includes a recapture period to protect from displacement and to ensure that homes that receive the credit are available to families and individuals with the highest need.

Additionally, the Moving Forward Act expands and improves the Low-Income Housing Tax Credit (LIHTC) by incorporating key provisions of H.R. 3077, the Affordable Housing Credit Improvement Act. The bill includes many important improvements to LIHTC and housing bonds including a 60% expansion of LIHTC, a reduction of the 50% test to 25% which makes allows for bond financing to reach more affordable housing projects, an expansion of private activity bonds, a permanent minimum 4% housing credit rate, and extension for program deadlines. LIHTC and private activity bonds are critical for creating low-income affordable homes, and we applaud the inclusion of these provisions.

The nation is in the midst of a housing crisis, and federal level intervention is essential to ensuring that housing needs are met. The Moving Forward Act is an important step in spurring pro-housing policy.