Six Ways a Biden Presidency Could Affect Real Estate
Over the past twenty years, the United States has had a low supply of affordable housing options for low-income families. Because of this, millions of families throughout the country spend more than the recommended 30 percent of their income on housing-related expenses. Joe Biden and his campaign have acknowledged that the housing market has some serious issues for certain demographics in the country. Below are some of the most impactful ways Joe Biden is planning on changing the real estate landscape.
Protect Homeowners from Abusive Lending Practices
Even in 2020, some mortgage lenders will take advantage of homeowners in a way that hurts them financially. To combat these predatory lending practices, Joe Biden is proposing a new Homeowner and Renter Bill of Rights. This bill would seek to protect homeowners in the process of loan modification from foreclosure. Additionally, this would also give homeowners a more straightforward path for legal recourse should a lender violate this bill.
Protect Renters from Abusive Landlords
The Homeowner and Renter Bill of Rights also protects those leasing or renting real property. This bill will state that landlords cannot discriminate against tenants that receive federal housing benefits. Finally, Biden’s plan will give those facing eviction legal assistance during this process.
End Discriminatory Practices in The Housing Market
For decades, redlining or denying certain community’s mortgages has long been an issue. Biden also seeks to remedy this issue by requiring states that receive certain federal grants to develop inclusionary zoning policies. Further, Biden also wants to hold financial institutions accountable for any illegal lending practices. Thus, borrowers—no matter where they are from—have a fair chance to receive a mortgage. Biden will also apply this standard to non-bank lenders as well.
Another policy meant to end discriminatory practices would be to create a federal standard for home appraisals. This ensures that houses in communities of color would not be assessed for less than comparable homes in white communities. While this mandate could help close the gap, it will not entirely fix the issues. The reason for this is that buyers ultimately decide how much they are willing to pay for a home.
Provide a Tax Credit for First-Time Homebuyers
Biden is proposing to give first-time homebuyers a tax credit as high as $15,000 to help with the down payment of their home. What makes this plan so unique is that homebuyers can actually use this money at the time of purchase. As home prices have risen significantly across the United States in recent years due to low-interest rates and a low supply of affordable housing, this policy could drastically help many people.
The current median home list price in the United States is $350,000. Thus, by following traditional advice, homebuyers would be required to pay anywhere between $35,000 – $70,000 for a down payment on a home. Even before the current economic crisis, many people did not have anywhere close to this amount in savings.
Biden’s campaign has publicly stated that they recognize these issues and want to do what they can to make homeownership more realistic for people. In addition to assisting first time home buyers, Biden’s campaign has also stated that teachers, first responders, and other public and national service workers will be able to receive down payment assistance. However, for someone falling into any of these categories to receive assistance, they would have to purchase a home in a struggling, low-income, or more expensive neighborhood that does not offer many reasonably priced options.
Supply More Renters with Housing Vouchers
Biden wants to increase funding to Section 8 vouchers. Thus, allowing every low-income American who qualifies for the program would receive assistance. This would be a major improvement to the program as 25 percent of households eligible for waivers don’t receive them.
Create a New Renter’s Tax Credit
In addition to funding this program, Biden plans on offering a low-income renters tax credit. This tax credit would cap their housing costs to 30 percent of their income. At the same time, Biden will also continue the eviction stoppage that President Trump began.
With many potential changes in the works concerning housing, you must understand Joe Biden’s real estate campaign promises. Bach of Biden’s policies could positively affect those in need of affordable housing options. However, each of these mandates will likely take time—and receive significant pushback—especially if Republicans maintain control of the Senate. Thus, be sure to continually check for any updates out of the Biden campaign concerning their housing policies.
Contact Our DC Law Office for More Information
Finally, for more information on six ways a Biden presidency could affect real estate, contact us at 202-803-5676. You can also directly schedule a consultation with one of our skilled attorneys. Additionally, for general information regarding real estate law, check out our blog.