Lawmakers want to expand affordable housing. Communities say, Not in my back yard – The Hill

Lawmakers are scrambling to pass affordable housing legislation after Sen. Joe Manchin (D-W.Va.) threw a wrench into yet another social spending package last week.

Manchin also rejected the Biden administrations Build Back Better Act last year, which would have allotted more than $150 billion for housing geared toward the middle class and lower-income Americans.

To get those housing units built, lawmakers from both parties want to boost tax credits that incentivize builders to construct cheaper homes for low-income people in order to offset the often drastically higher profit margins that builders can make putting up homes for the wealthy.

But even with those credits in place, builders are coming up against resistance on the local and state level because low-income housing can depress property values and drag down municipal tax revenues that determine things like the quality of local school districts.

This phenomenon is known as NIMBY-ism, or not in my backyard. It means that even though voters and taxpayers may support government efforts to build more low- and middle-income housing, theyd prefer to have it done somewhere that doesnt affect them personally.

During a hearing of the Senate Finance Committee on Wednesday scheduled to explore the role that tax incentives should play to make more cheap homes, Georgia builder Jerry Konter said that NIMBY-ism often appears in the form of local building regulations.

Many people on the panel have already talked about the regulatory burden in producing housing. And you know, NIMBY-ism is a large part of that also. I know that in my community, I experience people [who] want school teachers and police officers and fire people to serve their community, but they put in restrictions that affect housing prices that force them not to live within that community, Konter, who is also the chairman of the National Association of Home Builders, said.

Sen. Michael Bennet (D-Colo.) remarked during the hearing that teachers in his constituency are being priced out of their own school districts.

I had the Colorado Teacher of the Year come visit me a month or so ago, he said. Shes from Glenwood Springs, which is a rural community on the western slope of Colorado and in passing she wasnt complaining but she just made the observation that 70 to 80 percent of her colleagues in the middle school and in the high school where she teaches have to have two or three jobs just to live in Glenwood Springs. So, you know, this is a real failure on the part of our society, I think, to be able to create workforce housing in our states.

One extreme example of NIMBY-ism occurred in 2019 in Californias San Fernando Valley, where homelessness has been a major issue for many years. Efforts to build permanent housing for the homeless in the area have been met with fierce resistance from residents of the town of Chatsworth.

Residents argued that a proposal to build 63 studio apartments for the chronically homeless as part of a billion-dollar Los Angeles City bond program would harm their community and present a danger to local school children.

Another barrier to building affordable housing is zoning laws.

We hear from people around the country what zoning regulations have done, impeding the ability to build new homes across the country, Sen. Sherrod Brown (D-Ohio) said during the hearing. If we were to provide funding to support communities that update zoning regulations, would that help increase the supply of housing?

Konter said that zoning regulations can masquerade in various ways to prevent the construction of cheaper housing.

There tend to be zoning regulations that are put in place, and whether theyre intentional or disparate, the result is that they raise the cost of housing, and therefore we cant build affordable housing through those zoning requirements, he said.

Its a great problem, he went on. Our members face it constantly. Things such as design standards being added to zoning which has really nothing to do with zoning, but increases the cost of the housing. Zoning is a tremendous problem.

There are a number of tax incentives that lawmakers are pushing to build more middle-class houses and surmount the market-driven tendency of NIMBY-ism.

Sens. Ben Cardin (D-Md.) and Rob Portman (R-Ohio) proposed legislation creating a tax credit that covers the difference between the cost of building a home and selling a home in areas with bad commercial markets.

Private development lacks in some urban and rural areas because the cost of purchasing and renovating homes is greater than the value of the sale price of homes. The Neighborhood Homes Investment Act (NHIA) creates a federal tax credit that covers the cost between building or renovating a home in these areas and the price at which they can be sold, a 2021 write-up on the bill from Cardin reads.

The low income housing tax credit is widely regarded as the most powerful credit for creating low-income housing. Started in 1986, the program has shelled out around $8 billion a year to issue tax credits for the acquisition, rehabilitation, or new construction of rental housing targeted to lower-income households, according to the Department of Housing and Urban Development.

Sens. Todd Young (R-Ind.) and Maria Cantwell (D-Wash.) have a proposal to expand the tax credit in a variety of ways, including boosting its funding, repealing population caps associated with the credit and prohibiting local approvals.

The initiatives come as prices in the housing market continue to climb skyward. New data released Thursday put the median-priced single-family home at nearly $350,000.

With mortgage rates above 5 percent and the Federal Reserve raising interest rates, houses are less affordable in nearly every county in the country, according to a new report from real estate data company ATTOM.

Median-priced single-family homes and condos are less affordable in the second quarter of 2022 compared to historical averages in 97 percent of counties across the nation with enough data to analyze. That was up from 69 percent of counties that were historically less affordable in 2021, the company said in a Thursday statement.

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Lawmakers want to expand affordable housing. Communities say, Not in my back yard - The Hill