Budget Buster: A Bad Deal for Housing

Last week, Democrats unveiled yet another unrealistic, government expansion plan that comes with an enormous price tag. The bill, called The Green New Deal for Public Housing Act, would create new federal grants to transition all public housing into energy-efficient homes. The proposal is a component of the broader Green New Deal, which attempts to completely eliminate carbon emissions within ten years by exerting government control over essentially every sector of the economy, including agriculture, energy, manufacturing, transportation, housing, and health care.

While the proposal spends billions of taxpayer dollars on green housing initiatives, its goals are not connected to reality—it fails to make housing more affordable and does not provide an innovative and fiscally responsible solution to climate change.

Green Housing Would Bust the Federal Budget. The proposal’s price tag totals up to an astronomical $180 billion over 10 years, adding to the national debt, which recently eclipsed $23 trillion.[1] The bill creates seven new federal grant programs to transition all 1.2 million public housing units into energy efficient, zero-carbon homes. To make public housing carbon-free, public housing authorities would administer grants for numerous projects such as retrofitting housing units; creating recycling and zero-waste programs; constructing community projects such as organic grocery stores and community gardens; and upgrading appliance, electrification, and water infrastructure. The total cost of the program, per housing unit, would be roughly $150,000.

Despite some Democratic claims that Pay-As-You-Go (PAYGO) “is not an economically sound policy,”[2] others recognize that enforcing the House PAYGO rule, which requires legislation to be deficit neutral, is a “critical step toward putting our nation on track for a fiscally sustainable future.”[3] The current publicly-held debt stands at 79 percent of gross domestic product (GDP), drastically higher than the 50-year average of 42 percent of GDP,  and is projected to grow. Yesterday, Stanford University economist Dr. John Taylor testified before the House Budget Committee on the dangers of high and rising debt. He said, “high federal government debt has a cost: it reduces real GDP and real income per household compared to what these would be with lower debt levels.”[4] The Green New Deal for Public Housing Act would undoubtedly violate the House PAYGO rule, and add to the deficit and debt, thereby harming the economy.

Green Housing is Unworkable. Not only does this proposal bust the federal budget, but it also fails to provide a working solution for affordable housing and climate change. The policies would drastically increase regulations and government control of the housing market. Moreover, the proposal fails to direct limited resources towards policies and programs that make housing affordable. Instead, under this bill, taxpayers are responsible for funding nonessential projects such as construction of organic grocery stores and community gardens.

Republican Solutions for Housing. The Green New Deal for Public Housing Act does not solve America’s affordable housing shortage or address climate change. Lawmakers should support initiatives that lower housing costs by reducing burdensome regulations and making housing assistance programs more sustainable. Further, the U.S. is a leader in reducing greenhouse-gas emissions, and lawmakers should continue to promote technologies such as carbon capture, renewable hydropower, safe nuclear power, and energy storage. The Green New Deal for Public Housing Act increases the role of government while placing the financial burden on taxpayers. It’s fiscally irresponsible and unrealistic, and lawmakers should work together to find real solutions to make housing accessible and affordable.

[1] https://www.sanders.senate.gov/newsroom/press-releases/sanders-and-ocasio-cortez-announce-the-green-new-deal-for-public-housing-act.

[2] https://www.washingtonpost.com/business/2019/11/13/ocasio-cortez-sanders-pitch-green-new-deal-bill-public-housing/.

[3] https://davids.house.gov/media/press-releases/rep-sharice-davids-leads-freshman-colleagues-urging-house-committee-chairs-be.

[4] https://budget.house.gov/sites/democrats.budget.house.gov/files/documents/Taylor_Testimony.pdf.