The sheer scale of the bill, along with its focus on structural racism and government responsibility, places Warren’s brand of populist progressivism on full display. An undertaking of this magnitude is sure to energize her base. But would its combination of tax increases, grants to homeowners, government incentives, and bank regulation make housing more affordable to working- and middle-class people?
First, a quick summary of the bill. It aims to lower the cost of developing housing so landlords don’t have to make rents so high, coming at the issue from two different angles. From one end, it tries to increase the supply of affordable housing by pouring billions of federal dollars into programs that subsidize developments in rural, low-income, and middle-income communities.
From the other end, the bill attempts to strip away the zoning laws that made developing housing so expensive in the first place. Many of these zoning laws limit low-income residents from moving to wealthier neighborhoods. In Tegeler’s opinion, the laws are one of the main drivers of housing unaffordability. Those laws typically exist at a local level, so in order to target them, Warren’s bill creates a competitive block-grant program. The grant money could be spent flexibly—on schools or parks, for example—and is intended to appeal to suburban communities with stricter zoning laws. Those communities can only access grants if they reexamine and redress their land restrictions.
The bill also focuses on the ways housing inequality falls along racial lines. Notably, it assists populations that federal housing policy has historically failed: formerly segregated African American populations and families whose housing wealth was destroyed in the financial crisis. Under the bill, black families long denied mortgages by the federal government qualify for down-payment assistance, helping many in formerly segregated communities become first-time home buyers. The bill also invests $2 billion to support borrowers still recovering from the financial crisis with negative equity on their mortgages.
Additionally, the bill restructures the Community Reinvestment Act (CRA), a 1977 law proposed to monitor banks with discriminatory loan policies against communities of color. Warren’s bill gives the CRA more enforcement mechanisms and expands its policing power to include credit unions and nonbank mortgage companies, which were not as ubiquitous when the bill was passed. Lastly, the bill strengthens antidiscrimination laws by expanding Fair Housing Act protections to include gender identity, sexual orientation, marital status, and source of income, attempting to limit housing segregation in the future.
“Contrary to popular perception, [segregation] has never been systematically remedied,” Mehrsa Baradaran told me. She is the author of The Color of Money: Black Banks and the Racial Wealth Gap and advised Warren on the bill. “We have stopped actively segregating, but these segregation patterns stayed that way,” she said, “and really have been self-perpetuating on their own.” She believes that Warren’s bill could go a long way to remedy the federal government’s pattern of underinvesting in minority populations. Baradaran particularly appreciates the bill’s focus on the subprime-mortgage crisis because, in her mind, it is intertwined with the legacy of segregation. Communities with a history of segregation were especially vulnerable to subprime mortgages, she said, and were targeted by lenders and banks. “These formerly redlined areas were the prime market for these loans,” she said. In the financial crisis, America’s black population lost more than 53 percent of its wealth because of housing foreclosures. “That is not wealth that has recovered,” she said.