JULIÁN CASTRO’S 2020 HOUSING PLAN

People First Housing Announced on June 17th

DATA FOR PROGRESS

Data for Progress is keeping a running tab of housing policy proposals for announced or likely 2020 Presidential contenders. This is not a horse race, process-story exercise - we’ll be providing play-by-play policy analysis, ideological context, and suggestions to improve candidates’ policies, to help both campaigns and voters get to the best American housing policy. OVERVIEW and environmental injustices in local zoning.

Castro’s plan is split into three focuses: ►► Expands funding for federal Solving the affordability crisis and ending homelessness services and homelessness; enforcing Fair Housing prevention efforts and streamlines laws and incorporating new climate rules the systems that support stable for housing; and boosting affordable housing and wraparound services homeownership over Wall Street for Americans experiencing speculation. homelessness.

Key Points: ►► Recommits to enforcing Fair Housing laws for LGBTQ community, ►► Expands direct financial assistance seniors, the disabled, low-income to cost-burdened renters by making renters, and other vulnerable the Housing Choice Voucher Program populations (Section 8) a fully-funded entitlement program and by providing a tax credit ►► Requires ‘carbon scoring’ and for renters paying above 30% of their density planning for federal housing income towards rent. construction as part of $200 billion Green Infrastructure Fund. ►► Commits over $50 billion a year for new affordable housing ►► Establishes a National Housing construction, including new publicly Stability Fund to assist struggling owned homes,non-profit housing, homeowners at risk of eviction and and other permanently affordable requires that distressed mortgages be development. sold to local non-profit groups instead of private equity or other financial ►► Promotes equitable zoning to institutions. combat economic and racial segregation through incentive grants ►► Reforms multi-departmental to local government and by creating federal oversight of large real estate a Presidential Commission on Zoning investment companies to measure Reform to tackle racial, geographical, impact on the communities where they invest.

JULIAN CASTRO’S HOUSING POLICY 2 WHAT IT REVEALS dealing with the complexity of the federal government, particularly in housing, ABOUT CASTRO which can quickly get bogged down. This Former Housing and Urban Development plan clearly represents a wish list of things (HUD) Secretary Julián Castro is perhaps best Castro could have done while at HUD. positioned among his competitors to lead Recommits to Affirmatively on housing given his previous positions (he Furthering Fair Housing. Adopted was also mayor of San Antonio, a city that has at the end of his time at HUD grappled with both gentrification and sprawl). and abandoned by the Trump At the same time, Castro is also uniquely administration, it would quickly make vulnerable to progressive complaints over the a meaningful difference for Americans lack of transformative action on housing during who typically suffer in the housing his time in the Obama Administration. This market from overt discrimination proposal mostly threads the needle between (people of color, Native Americans, the embracing worthwhile parts of the Obama LGBTQ community) and more subtle legacy while laying out a much larger vision of discrimination (low-income renters, housing than the president was willing or able seniors, the disabled, and single to pursue. Deeply versed in the mechanics of mothers.)1 HUD, Castro’s plan gives nitty gritty attention to enforcing Fair Housing laws, reforming Reorganizes the federal government’s financing of affordable housing construction response to homelessness around and homeownership, and creating more renter a single definition. This is another and homeowner protections that could be instance of Castro harnessing less called “Obama Plus.” He also lays out a “Post- flashy but extremely impactful Obama” vision for new, green, and deeply bureaucracy, in this case by improving affordable housing by expanding the Housing coordination between departments Choice Voucher Program, the National Housing and funding sources with the goal of Trust Fund and creating a housing component ending chronic homelessness by 2028. to his Green Infrastructure Fund. Castro is clearly Castro has provided the most detail for aware of the tension between “Obama Plus” and solving chronic homelessness, which “Post-Obama” in housing; how successfully he affects over 500,000 Americans, so far is able to navigate it could serve as a fascinating in the campaign. proxy for litigating the Democratic Party’s Creates a National Housing Stability recent legacy and defining its future. Fund for struggling homeowners. The best foreclosure policy is to avoid them WHAT’S GOOD altogether, which often can mean micro-interventions for small expenses. ►► Embraces the good technocratic stuff This plan sets up a system to aid from the Obama era. The term isn’t homeowners avoid losing their homes trading high right now, but Castro is at by suring up these types of payments. heart a technocrat. This is useful when

JULIAN CASTRO’S HOUSING POLICY 3 Reforms the Low-Income Housing long argued that basing any rental Tax Credit (LIHTC). It expands funding assistance program on the current and federal oversight, includes local 30% income-to-rent ratio used by zoning and income-level reforms to HUD to measure rent burdens risks promote deeper affordability, and giving disproportionate assistance to includes incentives to extend the 15- wealthier single-person households in 30 year affordability cycle to 50 years. high-cost coastal cities at the expense Reforming LIHTC is a major priority of low-income family households in in our plan and Castro gets credit for less expensive cities because it doesn’t being the only candidate so far to account for the size and nature of a embrace it. household. Castro is the first candidate to tackle this issue thoughtfully.2

►► Ditches the bad technocratic stuff and Commits $45 billion for new housing embraces housing as a basic right. construction and rehabilitation Spreadsheets rarely speak to values through the National Housing Trust or vision, but the housing crisis needs Fund, including new publicly owned all three. Castro has made a sincere homes. Castro is currently the only departure from the Clinton/Obama era’s candidate to embrace new public incrementalism to embrace the growing housing construction, which is a major progressive consensus for more federal departure from the orthodoxy of his intervention in the housing market. time at HUD.

Converts housing choice vouchers Calls for a Presidential Commission into a fully-funded entitlement and on Zoning Reform. This doesn’t sound expands eligibility for all renters below revolutionary, but bringing HUD 50% AMI, and includes provisions together with the EPA, Department to count student loan payments of Justice, and Department of towards eligibility. Currently only 1 in 4 Transportation to iron out new federal households eligible for vouchers get guidelines for local zoning could be them, so these two changes stand to the most far reaching proposal in help millions of low-income renters this plan if it is given real teeth. Too in all types of housing markets, not many American towns and cities just expensive coastal cities. Rental have blocked development of dense assistance has been the centerpiece housing for overtly racist and classist of Senators Harris and Booker, but reasons. The legal system has been Castro’s plan is the most far reaching painfully slow on recognizing the role and highly targeted approach. this has played on economic, racial, and climate injustice and has done next to Creates renter tax credit based on nothing to offer federal remedies. This Small Area Fair Housing Market Rent commission is much needed step in that covers low and middle income changing the national conversation on individuals and family households. It these issues and could be a catalyst for also allows renters to defer credit into turning it into real action. a tax-advantaged savings account for a mortgage down payment. We have

JULIAN CASTRO’S HOUSING POLICY 4 ►► Links housing policy to climate policy. WHAT NEEDS WORK Castro is the first candidate to articulate a strong connection between the ►► More clarity on goals. Castro’s plan is not environment and how it is impacted by legislation, unlike the proposals from how and where we build housing. Kamala Harris and Elizabeth Warren, and significant portions of the proposal Creates a $200 billion Green from Cory Booker. This has advantages, Infrastructure Fund that will but Castro hasn’t seized them. He hasn’t decarbonize the housing stock through included numbers for his goals for energy and water efficiency upgrades. housing construction or rehabilitation, Given that electricity and heating of which seems like a lost opportunity to lay residential and commercial buildings out a helpful shorthand for his vision. His produce 29% of the nation’s carbon total of $40 billion for the Housing Trust emissions, this is an important piece Fund is welcome, but it still falls well short of the climate puzzle that needs to be of meeting the bare minimum in new approached so it doesn’t fall on tenants housing construction needed. He could to pay for necessary environmental have been bolder than other candidates 3 upgrades. and doubled his funding targets. He is clear about his goal of ending Connects climate justice to zoning homeleness by 2028, which is reachable, reforms around public transportation, but not knowing how many homes his housing density, and new resilience plan will build makes it harder to talk standards for housing construction. about on the trail. He also hasn’t talked It’s exciting to see attention paid to about funding sources. Senator Warren increasing walkability and public has raised expectations on this front for transit ridership over individual all candidates by laying out payfors for vehicle trips. Cars and trucks account all of her proposals, while capturing the for an additional 20% of American populist appeal of increasing taxes on carbon emissions but the cost of the rich. Castro doesn’t offer any signs of long commutes on our health and where he falls on this front. environment is not captured in cheaper housing further from job ►► More details on specific policy 4 centers. This needs to be brought into mechanisms. There are very important housing planning. This is a major step and very complicated ideas embedded in the right direction. in this plan, but there are few details on how they will work. The Presidential Requires “carbon scoring” for all federal Commission on Zoning Reform could housing construction projects to be a significant driver of change, but, ensure they meet climate goals and like many presidential commissions, it resilience standards. Coupled with the could also easily get bogged down in Presidential Commission on Zoning politics and burearcy without a clear Reform, this could create a powerful mandate. The same could be said for new standard of how the federal the Home Stability Fund and the Green government builds and rebuilds in an Infrastructure Fund. These could have a era of massive climate insecurity. real and lasting impact on renters and homeowners, but could also struggle to get off the ground like the Housing

JULIAN CASTRO’S HOUSING POLICY 5 Trust Fund has before this election cycle. restoring the Consumer Financial Castro may be banking on his association Protection Bureau, and reforming the with technocratic governance to brush Federal Housing Administration, but there off these concerns, but he will need to is not enough action to meaningful tackle incorporate details on the trail. There is large scale speculation in the housing clearly room for serious policy discussions market.6 We don’t see any way out of in this cycle and these ideas warrant more this crisis without severely restricting oxygen. speculative behavior and Castro lacks the bite that Senator Warren’s bill has. ►► Clearer stance on publicly owned homes. It is exciting to see the former HUD Secretary embrace construction of new publicly owned homes, particularly WHAT WE WOULD ADD given the controversy over the Obama ►► Double the proposed funding for new administration’s Rental Administration affordable housing. The National Low-In- Demonstration (RAD) program, which come Housing Coalition says the US is is seen by many progressives as a slow- missing over 7 million affordable homes.7 moving push towards privatization.5 Any presidential housing plan must meet Building new public housing would by this threshold as a bare minimum. We definition require repealing the Faircloth have called for the construction of over 10 Amendment, but curiously that isn’t million homes while People’s Action has mentioned here. called for as many as 12 million.8 The crisis ►► Still puts an outdated premium on calls for bold action and Castro’s plan homeownership. This bill speaks of must show that he thinks it can deliver. homeownership as a source of economic There are pieces in place to suggest that mobility and generational wealth creation it could, but even the growing consensus in terms that sound out of place with among candidates of adding around $40 the current discourse on housing policy. billion to the Housing Trust Fund would We know that those statements are only likely build 3.5 million homes through true for certain (mostly older and white) non-profit and other affordable providers. Americans, but not true for a growing Castro’s bill, like the others proposed so number of other (younger, non-white) far, simply do not meet the nation’s needs Americans. Rather than acknowledge even if enacted. that the rush to warp housing into a ►► Explicitly commit to repealing Faircloth wealth generator has caused the housing Amendment. The Faircloth Amendment crisis (and the deep pain and division in bans federal funding for new construction our country it represents), this plan looks of public housing. Castro is calling for the to repeat some of the same mortgage construction of new public housing. This lending and oversight issues that created means Castro is for repealing Faircloth, so this crisis and led to the Great Recession. he should say so. Our polling shows that ►► Bolder reforms of Wall Street landlords. support for public housing is high, partic- This is where Castro still demonstrates ularly among likely Democratic primary some lingering bad technocratic habits. voters, so it isn’t clear why he wouldn’t say There are some good ideas about it. requiring REITs to file impact reports,

JULIAN CASTRO’S HOUSING POLICY 6 ►► Call for the end of RAD. It’s possible that their seriousness. This might be where Castro’s hesitation to speak more about having a plan unrooted in specific legis- public housing is also rooted in his loyal- lation comes as a disadvantage to Castro ty to the Obama-era RAD program, and compared to his rivals currently serving the awkwardness of attacking a pro- in the Senate, so he will need to articulate gram whose introduction he oversaw. more over the coming weeks. We don’t This shows the complexity of addressing think there is much political liability for public housing for each candidate. Many not focusing on funding sources per se, candidates have not discussed housing, but comparatively on other housing plans let alone public housing, and there is a in the race, this gap is difficult to ignore. considerable cost for ignoring both in progressive circles. But wading into public ►► Stronger measures against speculation. housing with anything that looks like This is by far the weakest area of Cas- half-measures has its own risks. As for- tro’s plan. His proximity to the mortgage mer HUD Secretary, Castro absolutely has industrial complex may have soured his to address public housing and he gets appetite for bolder action in this field, but points for embracing new construction. there is simply no way to make housing But public housing needs much more a right without fundamentally removing support and he needs to demonstrate the speculation built into the housing sys- that his plan isn’t a half measure that tem. Large and small investors should not might not last contact with skeptical sub- be able to purchase single-family homes urban voters. backed by the federal government.

►► Mechanisms for funding real local zoning changes. Castro’s plan for a presidential commission on zoning, climate planning, and CDBGs is unique among candidates, and has the potential to significantly change the behavior of local govern- ments, but without some language about structure and funding, it’s hard to gauge

ENDNOTES

1. Kriston Capps, “The Trump Administration Just Derailed a Key Obama Rule on Housing Segregation,” Citylab, 01/04/18 2. U.S. Department of Housing & Urban Development. PD&R Edge, “Rental Burdens: Rethinking Affordability Measures,” accessed 02/04/2019 3. Jessica Leung, “Decarbonizing US Buildings.” Center for Climate and Energy Solutions, accessed 06/21/2019 4. “Car Emissions & Global Warming.” Union of Concerned Scientists, accessed 6/24/2019 https://www.ucsusa.org/clean-vehicles/car-emissions-and-global-warming 5. U.S. Department of Housing & Urban Development. Rental Administration Demonstration, accessed 06/20/2019 6. Ben Casselman & Connor Dougherty, “Want a House Like This? Prepare for a Bidding War with Investors,” New York Times, 06/20/19. 7. National Low Income Housing Coalition, “The Gap: A Shortage of Affordable Homes 2019,” 2019, accessed 06/26/19 8. People’s Action, “People’s Hearing on Housing,” accessed 06/20/19.

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