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Amy Sherman
By Amy Sherman August 11, 2022
Back to Increase access to affordable housing

Inflation Reduction Act has little in the way of affordable housing

Although the Democrats have long sought to increase investment in affordable housing, that goal fell by the wayside as they negotiated provisions to earn the support of all 50 members in the Senate in a sweeping bill that includes tax, environment and health care provisions.

When it was introduced in 2021, the Build Back Better Act included about $170 billion for affordable housing. This would have put President Joe Biden on a path toward achieving his campaign promises on housing, including establishing a $100 billion fund to construct and upgrade affordable housing.

But those provisions do not appear in the Inflation Reduction Act, which passed the Senate on Aug. 7 with Vice President Kamala Harris' vote breaking a 50-50 tie.

Will Fischer, senior director of housing and research at the Center for Budget and Policy Priorities, said the current legislation includes about $1 billion for affordable housing energy efficiency "but the large housing fund amounts in Build Back Better got left out of the final bill."

The funding is for energy and water efficiency and climate resilience in federally subsidized housing, all or almost all for renters. It can be used for projects that improve energy or water efficiency or enhance indoor air quality or zero-emission electricity generation or low-emission building materials. 

 U.S. Sen. Bernie Sanders, I-Vt, and the National Association of Home Builders criticized the bill, saying it doesn't address the nation's affordable housing crisis. 

"With home prices and rents rising even faster than inflation, rising interest rates, and a growing scarcity of both entry-level owner-occupied housing as well as affordable rental units, Americans are being squeezed hard," the association stated. "Rent inflation increased in June at the fastest pace since 1986, yet the bill fails to include any resources to expand the supply of housing, including badly needed affordable rental housing."

The National Low Income Housing Coalition said that by failing to include the targeted investments in affordable-housing that were in the Build Back Better bill, "Congress risks missing a once-in-a-generation opportunity to help end homelessness and housing poverty in America."

The American Rescue Plan that Biden signed into law in 2021 included nearly $50 billion in housing and homelessness assistance, but that was largely for temporary emergencies. 

The House is expected to pass the Inflation Reduction Act in mid-August, and Biden has said he will sign it into law. Congress still has time to pass other legislation to invest in permanently expanding affordable housing, but Biden's campaign promise appears to be on ice for now. We rate this promise Stalled. 

RELATED: All of our fact-checks about housing

RELATED: A look at Biden's progress on campaign promises on our Biden Promise Tracker

Our Sources

Congress.gov, H.R.5376 - Build Back Better Act, Aug. 7, 2022

Senate, Inflation Reduction Act of 2022, August 2022

CNN, What's in the Manchin-Schumer deal on climate, health care and taxes, Aug. 7, 2022

House Speaker Nancy Pelosi, H.R. 5376, The Build Back Better Act, Nov. 4, 2021

National Association of Home Builders, Letter to Sen. Chuck Schumer and Sen. Mitch McConnell, Aug. 2, 2022

Sen. Bernie Sanders, Prepared remarks: Sanders Says Inflation Reduction Act Doesn't Meet Needs of the American People, Aug. 3, 2022

Center on Budget and Policy Priorities, President's Budget Would Provide More Vouchers to Help Families With Rising Housing Costs, April 20, 2022

Center on Budget and Policy Priorities, Housing Investments in Build Back Better Would Address Pressing Unmet Needs, Feb. 10, 2022

National Low Income Housing Coalition, Senate Passes Budget Reconciliation Bill That Excludes Essential Housing Investments, Aug. 8, 2022

Telephone interview, Will Fischer, senior director of housing and research at the Center for Budget and Policy Priorities, Aug. 8, 2022

Email interview, Jen Butler, spokesperson for the National Low Income Housing Coalition, Aug. 9, 2022