President Joe Biden offered a series of concessions to Senate Republicans this week, the White House said, as he negotiates passage of his $1 trillion infrastructure deal — a plan that would have huge implications for the real estate industry.
In an Oval Office meeting, Biden proposed that a new corporate version of the alternative minimum tax would be imposed, set at 15 percent, rather than raising corporate tax rates to 28 percent from 21 percent to pay for the package, the Washington Post reported. The original funding plan was rejected by Republicans, who oppose the reversal of former President Donald Trump’s 2017 tax cuts.
White House press secretary Jen Psaki later added that raising the corporate tax rate above 21 percent remains a goal for the administration.
The infrastructure plan was initially to cost $2.3 trillion, but that price tag has slowly been slashed in negotiations. Still, the amount of spending required, as well as potential tax hikes, will pose hurdles for the Biden administration when it comes to passing the deal.
The infrastructure plan was introduced shortly after the passage of the $1.9 trillion stimulus package. The infrastructure deal is a part of Biden’s long-term economic agenda, which may ultimately cost $3 trillion.
But how much bang would Biden get for his buck? Though much may change as bargaining continues, here are five proposed provisions noteworthy for the real estate industry:
Well … Infrastructure, obviously
The plan aims to repair and replace damaged infrastructure across the country. It would modernize 20,000 miles of highways, roads, and main streets and repair the 10 most economically significant bridges, along with 10,000 smaller bridges in the worst condition. It would also replace thousands of buses and rail cars, repair hundreds of train stations, renew airports and expand transit into new communities.
Affordable and public housing
Under the proposal, more than a million affordable housing units would be either built or retrofitted. Public housing units would additionally receive funding for needed repairs. Energy efficiency would be a component of both new and improved housing options.
Middle-income housing and zoning
In addition to affordable and public housing, more than 500,000 homes would be built or rehabilitated for low- and middle-income homebuyers. The Biden administration would do so by offering Neighborhood Homes Investment Act tax credits over the next five years.
Biden also seeks to eliminate exclusionary zoning laws, like minimum lot sizes, mandatory parking requirements and prohibitions on multifamily housing. To do so, Biden proposes a grant program that awards funding to jurisdictions that eliminate such barriers.
Other buildings to be constructed or renovated include public schools, community colleges, child care facilities, Veterans Affairs’ hospitals and federal buildings. A focus would be placed on communities that lack such centers.