Tentative Deal Reached on Budget Reconciliation Package that Excludes Needed Housing Investments

Senate Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin (D-VA) reached agreement on July 27 on a reconciliation package that includes roughly $433 billion in new spending over the next 10 years on provisions relating to climate, energy, and health. The bill, “Inflation Reduction Act of 2022,” excludes housing investments needed to address skyrocketing rents and the severe shortage of affordable homes for the lowest-income renters. The cost of housing is the single largest component of the Consumer Price Index (CPI), a key measure of inflation; therefore, addressing the rising cost of housing is central to decreasing inflationary pressure on households, especially in the long term.

The Inflation Reduction Act would devote nearly $370 billion to clean energy and climate change programs and $64 billion to extend the expanded “Affordable Care Act” subsidies for three years, through 2025. The bill would also allow Medicare to negotiate for prescription drug prices. The package is estimated to raise $739 billion in revenue over 10 years from tax increases, enhanced tax enforcement, and prescription drug cost savings.

As it is currently written, the reconciliation bill would provide only $1 billion for energy upgrades to properties in various HUD housing programs, except for public housing. Congress has divested from public housing for decades, resulting in more than $70 billion in unmet capital backlog needs. As a result, our nation loses 10,000 to 15,000 units of public housing every year to obsolescence or decay and while units continue to fall into disrepair. Public housing residents are routinely exposed to hazardous and unhealthy living conditions, including lead, carbon monoxide, mold, asbestos, radon, and pest infections.

The House-passed “Build Back Better Act” included targeted affordable housing investments needed to bridge the widening gap between incomes and rising housing costs and address the severe lack of deeply affordable rental homes. The Build Back Better Act would have invested $25 billion to expand rental assistance to more than 300,000 households – an important first step toward making rental assistance available to all eligible households. The Build Back Better Act would have provided $65 billion to preserve public housing for future generations and to protect the health and safety of its 2.5 million residents.  It would have provided $15 billion to build and preserve more than 150,000 homes for people with the greatest needs through the national Housing Trust Fund. By failing to include the Build Back Better Act’s historic and targeted affordable housing investments in the currently negotiated package, Congress risks missing a once-in-a-generation opportunity to help end homelessness and housing poverty in America.

Senate Majority Leader Schumer hopes to bring the Inflation Reduction Act to the floor for a vote this week. However, the bill must first complete the “Byrd bath” process, in which it is vetted for compliance with budget reconciliation rules. Coronavirus-related absences may pose challenges since all Democrats will need to vote for the bill.

Read the draft bill text at: https://bit.ly/3Q1LCET

Read a summary of the Inflation Reduction Act at: https://bit.ly/3PIwGvy