Senate Democrats announced a proposal on July 16 to invest $350 billion in communities of color, including specific policies that would increase investments in affordable housing and promote racial equity in homeownership. The “Economic Justice Act” proposes to provide communities of color disproportionately impacted by coronavirus with $135 billion dollars for child care, mental health care, primary care, and jobs, as well as $215 billion over the next five years for affordable housing, homeownership, infrastructure. The bill would also expand Medicaid and address maternal mortality.
The bill proposes investing $25 billion over five years to create a renters’ tax credit and modify the existing Low-Income Housing Tax Credit (LIHTC) program. The renters’ tax credit would be allocated by states to qualifying properties and cap rent at 30% of the renter’s income. The LIHTC adjustment would modify the formula for the current four percent credit on construction of new housing properties, resulting in the construction of an additional 126,000 affordable units over the next decade.
The bill would invest $115 billion in infrastructure, including preserving and building affordable housing and targeting funding to the preservation of historically marginalized communities. The bill would reinstate vital fair housing protections, including the 2015 Affirmatively Furthering Fair Housing rule (see Memo, 1/13) and Disparate Impact rule (see Memo, 8/19/19) and reverse the Community Reinvestment Act to expand bank lending and investments in communities of color.
Additionally, the bill would provide $40 billion for a New Homeowner Down Payment Tax Credit, a refundable tax credit valued at $15,000 for low-income taxpayers. The bill also proposes a “10-20-30 Anti-Poverty Initiative,” which would require federal economic and community development programs to allocate at least 10% of program funds to communities reporting a poverty rate of at least 20% for the last 30 years. This strategic targeting of resources is designed to ensure historically disinvested communities finally receive the funding they need to thrive.
Read a summary of the “Economic Justice Act” at: https://tinyurl.com/yxmvnm3b
Read background on policy proposals at: https://tinyurl.com/y5p5nqm6