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Infrastructure Plan Could Create Opportunities for Remodelers

The Biden administration has proposed a massive $2 trillion infrastructure package that includes over $200 billion to build, preserve and retrofit more than 2 million homes and commercial buildings.

June 02, 2021
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The Biden administration has proposed a massive $2 trillion infrastructure package that includes over $200 billion to build, preserve and retrofit more than 2 million homes and commercial buildings.

If the proposal becomes law, it could provide an important opportunity for remodelers to help improve the nation’s existing housing stock and make it more energy efficient. The devil is in the details, and NAHB will be working hard on every detail that affects the housing industry.

Older homes, structures and infrastructure represent the biggest energy users and are less resilient to natural disasters. For remodeling, the aging of existing housing stock offers significant business opportunities. The typical home in the U.S. is 39 years old, with older stock in the Midwest and Northeast.

A solution to the severe shortage of affordable housing options

A fact sheet from the Biden administration notes the severe shortage of affordable housing options in America. "Millions of families pay more than half their income on rent, and home energy costs are a significant concern for American renters as well. And, across the country, people are struggling to purchase their first home.”

NAHB will be working closely with members of Congress as the measure unfolds on Capitol Hill, said NAHB Executive Vice President for Government Affairs James Tobin.

“Any time there is a chance to help with housing affordability, NAHB wants to work on that,” Tobin said. “During an affordable housing crisis, any money that we can dedicate to upgrading our affordable housing stock is critical.”

Next steps, according to Tobin, would include bolstering the housing programs that support housing affordability, particularly the Low-Income Housing Tax Credit (LIHTC) for the redevelopment and construction of new affordable rentals.

The proposal to produce, preserve, and retrofit more than a million affordable, resilient, accessible, energy efficient, and electrified housing units could create significant opportunity for NAHB Remodelers.

“One of the mantras at NAHB is that the nation needs to address the 130 million homes built before 2000, before contemporary building codes were in place,” said NAHB CEO Jerry Howard. “This infrastructure package is a down payment on the effort to make those homes more energy efficient.”

A labor concern raised by the infrastructure package

Tobin noted, however, that NAHB is concerned the package may impose Davis-Bacon Act union requirements that favor large contractors over smaller home building and remodeling firms. Indeed, an updated version of the plan released May 26, showed that while the plan calls for expanding the LIHTC, HOME Investment Partnerships program, project-based rental assistance, and other affordable housing programs, it imposes unprecedented labor mandates on projects funded by these sources.

“That is where the weatherization initiative fell down back in the Obama era,” Tobin added. “The weatherization efforts during the Obama administration never reached their full potential because of Davis-Bacon and requirements that employers use union labor. A lot of our members stayed away from the work. It wasn’t usually about the cost of labor. The big hurdle is the paperwork requirements.”

The Biden administration’s proposal pairs investment in housing with a new approach to land use that seeks to “eliminate state and local exclusionary zoning laws, which drive up the cost of construction and keep families from moving to neighborhoods with more opportunities for them and their kids,” according to the White House fact sheet.

Not just retrofits: A comprehensive infrastructure plan

In addition to funding for housing retrofits, the package also includes massive funding for highways, roads, bridges, rail networks, schools, child care facilities, and more. It also seeks to revitalize manufacturing, secure U.S. supply chains, invest in research and development, and prepare Americans for the jobs of the future. NAHB supports many elements of the proposal.

“For us, home building is an end user of a great transportation network and infrastructure system,” Howard said. “We want infrastructure to help people get from their homes to work and back home again.”

However, it may take a while to get this package moving. “It’s big, and the whole proposal has not been fleshed out yet,” Tobin said. “You’ve got a two-seat majority in the House. You’ve got a 50/50 Senate. It’s going to take a little while to get cracking on this. I think we’re looking at the end of the year before this gets wrapped up, and it’s not certain the measure, as proposed by the president, will be passed by Congress.”

For the most up-to-date information on the proposed American Jobs Plan, visit NAHBNow.com.

 

 

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