Rep. Alexandria Ocasio-Cortez of New York is introducing a new bill on Wednesday that could supercharge the federal government’s role in developing affordable housing as millions of Americans struggle to find a place to rent, let alone buy.
Ocasio-Cortez’s Homes Act would establish a new development authority in the federal Department of Housing and Urban Development. The authority would be able to acquire properties and fund homes with explicit tenant protections, set rents based on income and require permanently affordable purchase prices. The government would then turn the properties over to nonprofits, public housing authorities or cooperatives to operate.
Ocasio-Cortez said policy researchers estimate the plan could create 1.25 million homes nationwide, and most of them would be affordable to households considered extremely or very low-income. But the plan faces an uphill battle and is likely dead on arrival if Republicans keep control of the House in the upcoming general election.
Still, the concept known as social housing has gained traction in New York in recent years as rents, home prices and homelessness continue to surge.
Ocasio-Cortez pointed to New York City’s massive co-op complexes, like Electchester in Queens and Co-Op City in the Bronx, as examples of the model in a New York Times op-ed published on Wednesday. The piece was co-authored by Sen. Tina Smith of Minnesota, who is also sponsoring the measure.
“Outsourcing development to the private market leaves affordable housing subject to the boom-and-bust cycle of private investment,” the lawmakers wrote. “What’s more, the federal government relinquishes the oversight needed to protect tenants from abusive landlords and racial discrimination.”
The proposal would set rents for units financed under the Homes Act at 25% of household income, meaning the prices would range based on how much a tenant earns. It would also give residents opportunities to purchase their homes under the limited-equity model, which caps resale prices and profits.
The measure would also repeal a law effectively banning the creation of new public housing, and direct more money to local housing authorities for repairs.
New York State Assemblymember Emily Gallagher introduced a local version of the measure earlier this year. She said federal legislation will raise the profile of the social housing concept while boosting state efforts to create permanently affordable housing.
Gallagher said the plans remove the profit motive for real estate owners and buyers, potentially curbing speculation and abrupt price hikes.
“Private equity and greed have squeezed many of our community values of housing infrastructure,” she said
The legislation includes elements of other city and state bills, like the Tenant Opportunity to Purchase Act and Community Opportunity to Purchase Act, which would give renters and community groups first dibs on properties listed for sale.
Ocasio-Cortez’s bill proposes $30 billion in annual funding for the development authority.