Housing Policy

The Silver Lining in Biden's Massive Housing Plan

A Democratic White House and a Republican Senate might be the best of all worlds when it comes to federal housing policy.


A Democratic White House and a Republican Senate might be the best of all worlds when it comes to federal housing policy. We can expect the return of heavy-handed regulations under Joe Biden's presidency, but his worst, most expensive ideas involving increased federal funding likely won't make it through Congress. Meanwhile, the president-elect could lend crucial support to efforts to nudge local and state governments into zoning deregulation.

On the spending side, Biden has pledged to plow $640 billion over 10 years into new and existing housing programs, including a new $100 billion Affordable Housing Fund to finance low-income housing and energy-efficient upgrades. Biden also wants to fully fund the Section 8 Housing Choice Voucher program so that all renters who qualify for it receive a voucher, and he wants to devote $10 billion each to the existing Community Development Block Grant and Low-Income Housing Tax Credit programs.

Very little of that is good from a libertarian perspective. Luckily, none of it is likely to happen so long as Republicans control the Senate.

Biden is promising to revive an Obama-era rule, gutted by President Donald Trump, requiring jurisdictions that receive federal housing money to collect reams of demographic data, to identify supposed obstacles to fair housing, and then to craft plans to eliminate those obstacles. Biden also would bring back the "disparate impact" rule, which makes it easier to sue banks and other financial institutions for discriminatory housing policies. All of this can be done without congressional approval.

While that kind of bureaucratic make-work is troubling, Biden has also endorsed a more promising policy: making federal housing and transportation block grants conditional on loosening state and local zoning laws to allow denser development. That could be an effective nudge for the most tightly regulated, most expensive communities to get rid of the rules, including parking-spot quotas and lengthy permitting processes, that stymie the construction of new housing.

The Trump administration proposed a more modest version of the same policy but scrapped it in favor of an anti-development "save the suburbs" message in the run-up to the election. Bipartisan bills in Congress have proposed a similar approach. One, the YIMBY Act, passed the House in March, but has since languished in Senate committees.

Biden's eager endorsement of that kind of approach could help get the YIMBY Act and other related bills over the finish line, however. All considered, things could definitely be worse.