BBB provides critical, common-sense investments in housing affordability

On October 28th, President Biden proposed the “Build Back Better Act” framework, providing $150 billion in affordable housing investments. The Build Back Better (BBB) Act’s plan for affordable housing represents a comprehensive approach to tackling our nation’s housing crisis. By expanding rental assistance, increasing the number of homes affordable to households living on low incomes, and supporting local governments seeking to dismantle exclusionary zoning and discriminatory land-use policies, we can significantly impact the housing crisis across Montana. There are many components in the proposed framework, and we highlight several key investments below. 

  • Reduce housing instability and homelessness. The BBB plan provides a total of $26 billion for rental assistance, with $24 billion going towards new Housing Choice Vouchers for households living on poverty level incomes and $7 billion of those dollars directed specifically to households experiencing or at risk of homelessness and survivors of domestic violence and trafficking. (See our latest report on the Housing Choice Voucher program and its importance in Montana.) The $1 billion goes towards project-based assistance. The remaining $1 billion is for the Section 811 and 202 programs for people living with disabilities and seniors, investments that can be used for capital improvements and project-based rental assistance. Providing sustainable, multi-year funding for rental assistance is an essential step to keeping our neighbors housed and secure. 
  • Support public housing capital improvements. Keeping rents levels deeply affordable to households living on very low income can require public subsidies to build. The BBB plan includes $65 billion to repair and rehabilitate the nation’s public housing infrastructure. It provides an additional $15 billion for the national Housing Trust Fund and HOME Investment Partnerships program to construct and rehabilitate more than 150,000 homes affordable to households living in poverty and those experiencing or at risk of homelessness. These investments will have a significant impact in Montana. Our public housing is among the oldest in the nation. For example, in Helena, public housing is 63 years old on average —and in dire need of repairs to remove safety hazards like lead paint and mold, improve accessibility, and raise the quality of living to an acceptable standard for residents.
  • Address housing needs in Indian Country. Tribal communities confront housing shortages, unacceptable levels of environmental hazards in residents’ homes, and critical infrastructure needs. The BBB plan provides $2 billion to expand construction and rehabilitation of housing on reservations, build infrastructure to support housing, such as water and sewer lines, and support energy-efficient, climate-resistant development projects. 
  • Incentivize removing of exclusionary zoning and discriminatory land-use policies. There is a legacy and ongoing practice of communities locking out prospective low-income and BIPOC residents through land-use tactics, like minimum lot sizes, mandatory parking requirements, and restricting multifamily housing. These policies have also increased housing prices and construction costs. The BBB plan provides help to jurisdictions to dismantle these policies and, thus, expand housing opportunities for people who have been intentionally excluded from high-opportunity neighborhoods. The BBB plan creates a $5 billion incentive fund that awards flexible funding to jurisdictions that reduce these barriers that restrict housing production and lockout prospective residents.   
  • Build affordable housing and supportive infrastructure in rural America. Small, rural towns face storages of housing that is affordable for workers living on low incomes and for aging residents with accessibility needs. The BBB plan provides $250 million for a new Main Street Revitalization Programs for grants to small communities. These grants would increase supply of housing as well as revitalize downtown business districts. 
  • Build climate-resistant communities and energy-efficient homes. In an era of climate change, extreme weather events are displacing households across the nation. The BBB plan provides more than $2 billion for a new Community Development Block Grant Program for communities vulnerable to climate change. These grants target low- and moderate-income regions that are at high risk of suffering climate-related disasters. In addition, the BBB provides $500 million in grants and low-interest loans to renovate public housing, making them energy-efficient and resilient against extreme weather events. 

The targeted housing investments and complementary expansion of federal tax credits supporting those investments would provide greater levels of affordability, stability, and opportunity for those struggling to keep a roof over their heads. A failure to invest in housing has led to the crisis we find ourselves in today. In Montana, two out of three households living in poverty must pay more than half their income on rent. About 6,000 children are in families behind on rent payments, and many face eviction. Passing the BBB Act is our opportunity to change course by treating housing as critical infrastructure. Housing is just as important as roads, bridges, and schools. It will ensure everyone has the basic foundations we all need to lead stable and healthy lives.

The Housing Voucher Program Should Be Included in Federal Relief Legislation

This week, Montana Budget & Policy Center released a report on the federal Housing Choice Voucher (HCV) program. This program provides rental assistance for 5,628 Montana households living on poverty-level incomes, making an average yearly income of $12,360. These households include tenants living with disabilities, families raising children, and senior citizens who depend on these vouchers so they can afford to keep a roof over their heads. By making housing costs affordable, vouchers can prevent folks from having to pick between paying the rent, putting food on the table, or buying medicine. Rental assistance is proven to lift people out of poverty and improve long-term outcomes for children who get to grow up in stable and safe homes.

However, the HCV program has fallen short of achieving its intended goals. Housing vouchers are not an entitlement benefit. The number of households that qualify for rental assistance far exceeds the number of vouchers available. There are many steps our federal government can take to improve the efficiency of this program. Congress is currently negotiating legislation we hope will make long-term, sustainable investments Americans need to build healthy, secure, and successful lives. This plan should include providing more affordable housing and expanding the housing choice voucher program.

Please read our latest report to learn more about how vital the housing choice voucher program is to so many of our neighbors.

House Bill 397 Would Increase the Supply of Housing Montanans Can Afford

The Senate Taxation Committee will take executive action this Friday on HB 397, the Montana Workforce Housing Tax Credit. Montana’s workforce housing shortage is one of the most critical issues impacting urban and rural areas across the state. Rent in Montana has grown 62 percent faster than the national average, and 668 percent of Montana renters living on very low incomes pay more than half of their income for housing. This system is simply unsustainable. This program is a much-needed tool to increase Montana’s housing supply as part of the state’s post-COVID come-back plan.

HB 397 incentivizes developers to build more homes for working families. The Montana Workforce Housing Tax Credit is a companion program to the federal Low-Income Housing Tax Credit (LIHTC) and, when paired together, would double the use of these federal funds. About 20 states have state-based housing tax credit programs to address their workforce housing issues. For example, after Colorado renewed its state housing tax credit in 2015, the program helped double the number of new and renovated homes affordable to working families, created 19,000 jobs, and generated $1.5 billion in total economic benefit. Montana’s state housing tax credit looks to deliver similar results in the number of homes created, as well as the financial and economic benefits generated by tax credit supported housing projects.  

HB 397 would create:

  • More workforce housing: Passing a state-based housing tax credit would allow Montana to double (or possibly triple) the number of rental homes that we can create or preserve each year.
  • More investment: A state credit could bring in enough private investment to produce 18,000 homes and generate over $828 million in economic activity over ten years.
  • More workforce housing in rural areas: Since 2016, $310 million for 1,900 apartments in federal tax credit requests were denied due to lack of available credits, with more than half of unfunded projects located in rural areas. A state tax credit can support larger urban developments, making more federal tax credits available for rural areas and small towns.
  • More good-paying jobs: A single new housing construction project supports 13 jobs earning $600,000 in labor incomes per $1 million invested in new multi-family housing construction projects. Additionally, more available workforce housing allows employers to hire and retain the employees they need to grow their business.

Everyone deserves a home, but homes are also critical to ensuring a stable and productive workforce. Our state continues to suffer the social and economic consequences when people cannot find affordable and quality housing in the communities where they work. Our legislature must act urgently to address this problem by passing the Montana Workforce Housing Tax Credit program.