How would the American Jobs Plan address insufficiencies in affordable housing and equitable development?

Following up on our previous overview of the American Jobs Plan, we explore some specific provisions related to land use and development intended to address national insufficiencies in affordable housing and related infrastructure, and also make some recommendations to improve it.

Within the expansive American Jobs Plan, there are four land use and development proposals that we especially want to highlight that are vital parts of the puzzle for producing more housing that more people can afford in locations with lower transportation costs:

  1. $213 billion to build, preserve, and retrofit homes and commercial buildings through tax credits, formula funding, grants, and project-based rental assistance. Of this $213 billion, $40 billion is allocated to improve public housing infrastructure and $20 billion to the bipartisan Neighborhood Homes Investment Act (NHIA) to build and rehabilitate 500,000 homes over the next five years.
  2. Working to eliminate exclusionary land-use patterns through a new grant program that would award flexible and “attractive” funding to jurisdictions that take steps to produce affordable housing.
  3. The remediation and redevelopment of vital Brownfields and Superfund sites through a $5 billion investment to create new hubs of economic growth and job creation.
  4. $20 billion to strengthen our nation’s infrastructure through a new program that will, “…reconnect neighborhoods cut off by historic investments and ensure new projects increase opportunity, advance racial equity and environmental justice, and promote affordable access.” 

When it comes to provisions related to land use and development—in addition to the executive actions that we are tracking—Smart Growth America requests that the Biden administration also considers these four things, in the American Jobs Plan or within some other legislative proposal: 

Make state authorities accountable for the implementation of lasting zoning and land-use changes: Congress should require states to leverage infrastructure funding to ensure that housing for a diversity of incomes is enabled within walking or biking distance of transit stations, including buses, BRT, and rail.

Renew the Federal Brownfield Tax Deduction: Congress should renew the Federal Brownfield Tax Deduction. Before it expired in 2011, the Federal Brownfield Tax Deduction allowed a party who voluntarily investigated and remediated contaminated property to deduct its cleanup costs in the year incurred on their federal income tax return. We should be encouraging more of that kind of responsible development.

Commit to an equitable distribution of grant project funding, the passing of the REHAB Act, and simultaneous investments in vital public infrastructure: Congress should pass the REHAB Act (H.R. 1483), which provides tax credit assistance for rehabilitating non-historic buildings near transit, making it easier to provide more affordable housing, among other things. This credit can help provide critical financing to local builders so they can help revitalize downtowns, upgrade deteriorating public infrastructure, and expand access to attainable housing in locations with affordable transportation options.

Improve the Opportunity Zones Tax Incentive: We urge future Opportunity Zones action by Congress, the US Treasury, and the IRS to require tracking and reporting outcomes for Opportunity Fund investments and to provide regulations that encourage pairing investments with other community development tax credits and programs. (You can read more about Opportunity Zones and small businesses in Unrealized Gains, a recent SGA report.) 

While the American Jobs Plan is ambitious, it still lacks specificity when it comes to programming and eligible activities for tax credits and grants. Without better oversight and clear guardrails, suitable measures of success, or comprehensive planning, we may only see marginal improvements or surface-level initiatives that could serve to further harm vulnerable communities in the long term. 

Or like we said in the last post, “how we target the funding matters as much as how much we spend.” 

For those so inclined, you can read a longer detailed memo about SGA’s take on the land use and development provisions in the American Jobs Act here.