The Build Back Better Act “could have the largest positive impact of any federal legislation on affordable housing passed in several decades,” says Fitch Ratings.
The latest version of the bill, which was passed by the House in November and is currently with the Senate, calls for $150 billion for affordable housing initiatives. To give that amount some perspective, Fitch notes that it is nearly three times the annual funding for the Department of Housing and Urban Development (HUD), which has averaged $54 billion per year over the past five years.
In addition to calling for an expansion of the low-income housing tax credit (LIHTC) program, the bill seeks to increase funding for key HUD programs, including $25 billion in new rental assistance, which provide a more than 50% increase in average annual funding, according to Fitch.
Build Back Better also seeks $65 billion to help preserve deteriorating public housing and $15 billion for the national Housing Trust Fund, which have been among the priorities for the National Low Income Housing Coalition and other advocates.
“Affordable housing remains a significant issue with homeownership out of reach for many and too few multifamily rental units to meet the current needs,” says Fitch. “The BBB legislation would help continue the relief efforts and infuse the sector with a significant boost when compared with prior funding for affordable housing.”