Benzinga and Yahoo Finance LLC may earn commissions or revenues on certain items via the links below.
The numbers often differ on the extent of the housing shortage in the United States. Estimates typically range from 1.5 million to 5.5 million homes, and almost everyone agrees that we are not building enough. The question of how to create more affordable housing is a central one as we head into the presidential election.
Do not miss it:
While the details of presidential candidate Kamala Harris’ housing plan are still being hammered out, many are wondering whether she will support President Biden’s plans for a 5% rent increase cap for institutional landlords. The plan has generated controversy, with many industry insiders saying it will do little to fix existing problems. Bob Broeksmit, president and CEO of the Mortgage Bankers Association, called the plan “a counterproductive policy concept that ultimately harms renters by distorting market prices, discouraging new construction, and degrading the quality of rental housing.”
President Donald Trump proposed privatizing government-sponsored enterprises, Fannie Mae and Freddie Mac, during his first administration. One of his most famous real estate policies was Opportunity Zones, a plan to incentivize builders and developers to create projects in underserved neighborhoods. Opportunity Zones are areas designated by state governors where investors receive special tax treatment, including deferred capital gains, for their investments in Qualified Opportunity Funds. Opportunity Zone projects include all types of properties, from luxury hotels to affordable housing communities.
Massachusetts Sen. Elizabeth Warren isn’t waiting for the election to unveil her plan to boost housing. In an interview with WCVB in Boston, she announced she’s introducing a new housing bill in the Senate, and U.S. Rep. Emanuel Cleaver is reportedly doing the same in the House. The new bill calls for building three million homes nationwide. The American Housing and Economic Mobility Act is designed to lower costs for renters and buyers, including first-time homebuyers.
Where the funding would come from could be controversial. Warren said: “This bill is paid for entirely by changing the rules around the estate tax so that billionaires can’t pass their fortunes on to their children by paying virtually nothing, which is what they do now.” Warren was quick to clarify that this would not affect most people who want to leave something to their children.
Warren said the bill would provide money to communities that could create housing by changing zoning and adding density. She also said there would be funding for schools and other community amenities, including public transportation. The bill provides funding through 2031 for the First Homeowner Grants program. It outlines several ways communities can receive a federal grant, including allowing accessory dwelling units, revising parking requirements and reducing lot sizes.
Trending: Private markets have historically outperformed stocks in every downturn of the past 15 years — build your diversified portfolio.
Specific allocations in the bill include $445 billion in the Housing Trust Fund to create two million homes for low-income families and $25 billion for the Capital Magnet Fund, which will be matched 10:1 with private capital to build more than 750,000 new homes for low-income and middle-class families. The bill also calls for $4 billion to create a Middle-Class Housing Emergency Fund for middle-class buyers and renters and $1 billion for rural housing.
Some housing advocates have already voiced support for the plan. Sharon Cornelison, director of housing at the Consumer Federation of America, said, “This bill would boost affordable housing construction, encourage communities to remove exclusionary and unfair zoning laws, and ensure that first-time home buyers, including veterans, also have their chance to build equity through homeownership.”
While many housing reform bills have been introduced in Congress, many never make it past the debate stage. For a bill to gain real momentum, it will likely need bipartisan support, which can be hard to come by in the current political climate.
Looking for opportunities with higher returns?
The current high interest rate environment has created an incredible opportunity for income-seeking investors to earn huge returns, but not through dividend stocks… Certain real estate investments in the private market offer retail investors the opportunity to take advantage of these high-yield opportunities, and Benzinga has identified some of the most compelling options for you to consider.
For example the Ascent Income Fund EquityMultiple aims to provide stable income from senior commercial real estate debt positions and has a historical distribution yield of 12.1%, backed by real assets. With payment priority and flexible liquidity options, the Ascent Income Fund is a cornerstone investment vehicle for income-oriented investors. First-time EquityMultiple investors can now invest in the Ascent Income Fund with a reduced minimum of just $5,000. Benzinga readers: Earn a 1% return on your first EquityMultiple investment when you sign up here (accredited investors only).
Don’t miss this opportunity to profit from high yield investing while rates are high. Check out Benzinga’s favorite high yield offerings.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
This article Senator Warren Wants to Tax Billionaires’ Estates to Pay for Housing originally appeared on Benzinga.com
